Trends in Hiring in India

Shreyasi Deb examines the trends faced by employers looking to hire a professional workforce in India. She is the HR manager for a start-up in Mumbai. 

There is a sea change in the way the new generation of Indians is joining the workforce. Though the larger socio-economic changes have affected all age groups of workers, there is a distinct generational difference between those who started working in the last decade or so and are in their thirties and the ones who are entering Indian workplaces now.


The hardly twenty-something Indian millions (almost 40% of the Indian population of over a billion are younger than 15 years of age according to The Census of India, 2001), interestingly are not too different from their counterparts across the world. A recent Fortune Magazine issue (“Manage” us? Puhleez…, May 28, 2007) on the new workforce says that we, the employers, simply don’t understand the globalised ‘twentysomethings’ we intend to hire. This same magazine quotes Bruce Tulgan, the founder of leading generational-research firm, RainmakerThinking, saying “This is the most high-maintenance workforce in the history of the world. The good news is they’re also going to be the most high-performing.”

Our experience underlines all of the above and more. We work for a start-up and we have been around for slightly more than two years. We have all the things going for us—we have a great idea, a good product, we have stability and world-class VCs funding us. We also have a star-studded team of founders, we are on the edge of technology and workplace infrastructure, we have a talented managing team and we are clearly differentiated from the outsourcing employers who compete for talent with us. Yet, it is real hard work for us to attract the young, entry level people we want and to keep them with us. The experienced people might be slightly easier on us but their expectations are no less either.

We have changed our hiring techniques, lowered our expectations at times and have upped our induction inputs to make the most of the talent that we get. There are clear trends which stand out as we scan the prospective employees and find ways to control attrition. I have tried to gather some of our learning and observations and have then, tried to extrapolate them in the context of the larger Indian employment scenario.

There is a clear shortage of skills and experience.

The best of the breed among the new workers are too concerned about their career paths and prefer quitting to slogging hard for a medium term objective. They are well-informed and confident and know that they really do not have a need of building economic security, unlike the earlier generation of middle-class Indians. Their abilities vary from mediocre to above average but they all want the best-in-class benefits and get easily de-motivated, partly because of their lack of experience and partly because they are networked and constantly compare the benefits their peers get.

We have been trying to hire a team of software developers with a couple of years’ work experience and our findings are startling.
Indian IT services companies hire in bulk (their revenues being determined by FTE) and they do not differentiate on quality of technical schools and educational background. Also candidates are quite keen on on-site opportunities and are comfortable as long as they are provided with a 25-35% hike in compensation when they shift from one employer to another. However the case completely changes when we look at niche product based companies like ours. The lack of on-site stints and the prospect of being stuck to a single domain/product platform have to be made up with very high compensation hikes and other work-life benefits.
The sole driver for hopping employers seems to be monetary without any respect for the interview process and career stability and employers don’t pay much heed to internal or external parity in compensation.

Also, a corollary of the shortage of skilled people leads to a booming demand for whatever talent is available in the market. A lot of Indians working/studying abroad are trying to come back seeing that there are enough opportunities here and compensation is at par with the dollar equivalent. They might be compromising on the comfort of life in the West but many of them prefer to raise their children and take care of their parents here, if they do not lose anything in terms of real income.

We pay at par with the market but we are very careful about setting standards and whom we select. So our conversion rate of applicants is really low. Compounded with this issue, is the fact that there are too many other employers (often compromising on talent quality and the value they pay for it) who are competing with us for the same pie. Hence our rate of offer rejections has also gone up significantly.

Today, in India, anybody with requisite technical skills (soft skills and the level of emotional Intelligence are not checked much) can expect to have anything between three and five new job offers whenever they look out, leading to blurring of their commitment, increased hiring costs for prospective employers and losses in terms of projects getting slower due to lack of people.

The shortage of experienced workers has pushed up the average number of offers, the percentage hike in the compensation provided by the new employer and consequently the skill-reward mismatch in the growing industries of the Indian economy. This has been our constant experience.

Given the changing trends in employee expectations, there is a tension on HR policies and practices.

During the first levels of interviews, candidates check if the organization allows for flexi-timing, telecommuting or take a cafeteria approach towards compensation. Other concern areas are benefits like company conveyance, paid entertainment and breaks from work. We are a small organization of about two hundred people and we constantly adjust and develop rules to accommodate varied employee needs. We have allowed for long leaves (without pay, of course) for sickness, maternity, for professional certifications and examinations. We have also allowed for changes in the employment contract to accommodate flexi-timing and half-timing to retain good performers.

The new generation employees are keen to see where their careers are going but they are impatient and short term results that they see right now are of foremost importance.

Also we have observed that most of the fresh college graduates are weak in interpersonal skills and have poor service orientation towards their professional peers and their teams. These young Indians have been independent functionally as well as intellectually from a younger age as compared to those a decade older. Though most of them still live with their parents, many have moved out of native towns and manage their own lives with parental financial and emotional support as a back-up. The Indian family system is surely changing.

Young workers prefer huddling together and building social networks in the workplace.

Hence an organization that allows such opportunities is preferred over others. They are much more used to diversity, do not identify singularly to their socio-religious background and wouldn’t easily accept standardized rules that apply to everyone across the board. Real-time information has broken down all rules.Incorporation into the organization seems to be a very significant point. We invest a lot of our senior management’s time in the induction program, designed specially for people fresh out of college. For senior employees, creating excitement around our ideas, product and the promises we might be able to deliver as a small, agile organization is extremely important for us.

In con
clusion, Indian economy and workers will fast lose their competitive advantage if the fall in employability of the workforce and the spiraling wage costs continue at this rate. Attrition continues to be a major problem not only in IT and ITeS industries but also other emerging sectors like BFSI. There is also a trend of people with applicable skills to shift out of manufacturing, utilities and construction which traditionally pay less. This trend is particularly alarming because India must develop its infrastructure to meet the growing demands of the economy.

On the other hand, employers must understand that beyond higher pay and unending bargaining, one needs to follow a Total Rewards philosophy which will look into the larger issues of employee motivation through pay & benefits. Well laid career plans are essential, as I have mentioned earlier, apart from a balance between performance expectations and growth aspirations.

Tamara J. Erickson, co-author of the seminal 2006 book ‘Workforce Crisis’ writes on a discussion board on Harvard Business Online (www.hbsp.com) that this generation of parents have been able to instill a kind of deeply-held confidence among their children, telling them that they can achieve almost anything. So the children have turned out to be full of energy, creativity, potential as well as an almost irreverent attitude towards any challenge which includes the workplace. Looking at them through the experiences of any other generation will be a great mistake. Erickson says this of mostly American children but barriers of differences have long been rubbed off and today’s Internet powered Indian youth is no different from their counterparts across the world.

4 thoughts on “Trends in Hiring in India

  1. Shefaly

    Good article. You confirm some of my impressions based on my interaction with people in my family as well as with friends who are recruiters and headhunters.

    Penelope Trunk in Madison, WI writes about some of these issues as being those that plague Gen-Y or Millenials.

    I do think however that there is a thin line dividing self-confidence from misplaced arrogance. Only time will tell who is on which side.

    Thanks for providing food for thought and fodder for more arguments and discussions to be had with my friends and colleagues! 🙂

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  2. Shreyasi Deb

    Shefaly,

    Thank you for your comment. I had written this last year and it already looks dated when I re-read it now. Yes, irreverence is a key theme of this generation. One good consequence is that the employers will always have to out-wit their employees to stay ahead so increasingly we will see innovative workplaces. However employees need to develop their patience and understand that it is not possible to exceed expectations all the time.
    I think entrepreneurs who got bored with their employers, started something new of their own and then found themselves on the other side of the table will be able to give us an interesting perspective on this.

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  3. Biraj Bhusan Chatterjee

    Sreyasi,

    A great revelation of facts. Where we go from here ? A complete mechanical process of hopping from one place to another by briliants but for what. Is it money, position, work-satisfaction or completely unknown objects. My personal experience suggests me to apprehend that we do not become westerners where computer talks and human beings become dummies.

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