03 Oct 2017 18:26 IST

India’s corporate scene is increasingly becoming Darwinian

The ‘survival theory’ is playing out in India, with companies following the ‘up or out’ policy

Charles Darwin’s ‘Survival of the Fittest’ theory is playing out in the Indian corporate scene like never before.

Summed up, it amounts to this: If you’re someone with top skills, competencies and work ethic, you’re likely to be rewarded much better than your peers. Otherwise, you’ll just languish in the back alleys of corporations, never knowing when things can turn against you — unless, of course, you inch up the competencies ladder.

Performance above all

Decades ago, consulting firm McKinsey institutionalised an “up or out” policy. General Electric, under the powerful Jack Welch, told its disparate business heads to either be in the top three in the world or face scrutiny, which could end up in selling the entire business.

American firms are ruthless when it comes to execution of their corporate vision, looking at merit and the bottom line in practically every decision they take. The survival theory was reinforced again last week when media stories surfaced that tech giant IBM now has more employees in India than in the US. It is a fascinating turnaround for IBM and India — the company left India for good in the 1970s only to return in the 1990s through a partnership with the Tata organisation.

Oracle, another superpower in the world of technology, is only slightly less remarkable in terms of recruiting Indian talent. It continues to have the most employees in the US, perhaps because of its large sales force. But next up, India ranks as the country with the most Oracle employees. For a company that operates in over 100 countries, India’s appeal to this firm is an amazing testament of the country’s top talent.

Microsoft, Google and all major tech companies operate out of India, and not just to run back-end office tasks. Indians at these companies are working on cutting-edge technology and for several years now, the latest features on their products worldwide were probably developed, refined and perfected in India before global launch.

Being the best

The only way you get to work on such teams is if you are an outlier with competencies so out of the ordinary, that you are practically a rockstar in your field.

The Dean of placement at a famous engineering college in Bengaluru told me that a top Indian IT major has embraced this ‘employment by merit’ vision. Gone are the days when the company would scour engineering campuses with standardised tests and offers of employment, bringing in hundreds of employees to be retrained before they are deployed on projects.

Today, this company asks for the best performers at a few select institutions, and grills them in multiple interviews. If selected, they are paid an annual compensation that is 500 per cent higher than the lowest general tier. Only one or two candidates are chosen at this elite level, and only from two or three top institutions.

Such candidates are directly placed to work with the CEOs or COOs of an organisation, exposing them to power, influence and the inner workings of the company. These kinds of selective hiring practices are rare for Indian companies.

The other side

Now, for the other side of the picture.

In India’s IT-BPO sector, lower-skilled middle management tiers are under severe stress. These employees came of age during the booming Y2K years, when the world needed an army of coders with brawn, but not necessarily great technology skills.

Growing up in company ranks as India Inc. took off, many of these employees now hold senior positions disproportionate to their skills and demands of the market. These companies are now beginning to ask these VP-level executives to justify their existence — or face termination.

The situation of these employees is complex. If they are among the 20 per cent who survive, they have to dramatically step up their contributions to the company, learn new skills and compete with younger talent, while keeping the next round of termination action on their radar.

If they are among the 80 per cent who do not survive, they face uncertainties in the job market that they have never experienced. Not having written a resume in years or appeared for a job interview, they may find that they have to take huge cuts in compensation for their next position, or even face the possibility of early retirement.

Being aware

The IT-BPO industry’s headwinds have not gone unnoticed by younger engineers. The Dean of placement at the above engineering college also told me that last year, 460 offers came out of IT-BPO companies such as Infosys, Wipro, Cognizant and Accenture. Only 44 students accepted the offers. Students have bright antennae to sense trends and act accordingly.

If India’s industries demand substantially more from a smaller employee pool, it does not augur well for the millions of new comers, who enter the job market with limited skills. Forces like automation and in-sourcing are only complicating the picture.

This is a huge headache for the nation.

Recommended for you