Train recruits or recruit the trained?

Were you to ask Santanu Paul — CEO and Managing Director of TalentSprint P Ltd, Hyderabad (http:// >bit.ly/F4TSantanuPaul ) — whether he sees professional skill development as a commercial venture or a social one, he would not fall into the ‘or' trap. “It is both,” avers Paul, during the course of a recent interaction with eWorld.

One can say it is a for-profit social model, he elaborates. Addressing unemployability definitely gives it a high social relevance; and helping people earn a paycheque is an enabler of economic and social inclusion, Paul acknowledges. Yet it is important to make the solutions commercially sustainable and scalable so that professional skill development firms do not start looking for government subsidies or handouts, he reasons.

“In that sense, it should be seen as business for positive change and social good. For example, the National Skill Development Corporation, which is committed to creating 150 million skilled youth across multiple industries by 2020, is injecting a sense of nation-building into the discourse. They are making a very valuable contribution in terms of shaping the IT sector.” Our dialogue continues over email…

Excerpts from the interview.

What has changed in recent times for the IT sector in terms of talent?

After a rather grim period, the Indian IT sector is back with a bang. Talent acquisition is accelerating, wages are ballooning, and attrition is peaking. The key question is whether we return to the status quo that preceded the meltdown.

For sure, operating efficiency, productivity, and dynamic resource management are no longer virtues being debated, but imperatives that have to be implemented. IT firms face severe margin pressure because of dropping billing rates, escalating operating costs, and emerging competition from other parts of the world.

The basic premise of cost arbitrage is under attack. Given this backdrop, lean processes are definitely in. Especially so for mid- and small-cap IT firms!

Do you sense a new-found urgency in how the IT sector is thinking about talent?

An expense line item that has been giving IT companies much indigestion over the years is induction training. These in-house boot camps for entry-level recruits are designed to overcome, through a compressed model, the inconsistency and variability in their professional skills and knowledge.

Nasscom estimates that the Indian IT and ITES sector spends a mind-boggling Rs 3,000 crore per year on such boot camps! The per capita investment is Rs 2.5 lakh per new recruit.

So, for every 1,000 entry-level engineers we recruit into our companies, we are effectively spending Rs 25 crore to make sure the recruits can add value to our businesses. This is the equivalent of setting up a pipeline from the oilfield to our homes, so each of us can refine crude oil in our backyard in order to run our vehicles.

This DIY model is no longer sustainable and mid- and small-cap IT firms are looking for a way out.

What is the supply side situation in terms of entry-level talent?

India's demographic dividend has the potential to become a demographic nightmare. Nasscom estimates that less than 26 per cent of engineering graduates are employable, and I think they are being quite generous. The fact is that more than 80 per cent corporate attention is lavished on less than 20 per cent of the college output.

The remaining 80 per cent of college output drift every year into off-campus mode – forgotten by placement officers, written off by companies, and ultimately overtaken by next year's graduates. This is a twilight zone of questionable courses, fake experience certificates, fudged resumes, and desperate referrals from friends and family members trying to find them any job at any cost.

How did the supply side get to this state?

Many off-campus candidates do have good academic results from their class X and XII board exams. However, their inner spark has been extinguished after spending four years in dubious colleges with inferior faculty, poor infrastructure, and no academic culture.

If 4 out of 5 college graduates are unemployable, one can only say the attempt to make higher education widely accessible has boomeranged in terms of quality of outcomes. Printing degree certificates has taken precedence over providing meaningful education.

Many believe that the epidemic of unemployability after an expensive higher education is a precursor to social unrest.

Your take on the emerging professional skill development models and methods.

The way forward involves companies switching from a post-recruitment training model to a pre-recruitment training model. The luxury of recruiting large numbers of fresh graduates and incurring the cost of expensive in-house boot camps is neither affordable nor scalable.

Instead, it is better for IT firms to partner with professional skill development firms where pre-filtered candidates undergo rigorous experiential learning based on a world class industry curriculum, and get fully certified in their area of skill before they are recruited into the firms.

Instead of training the recruits, companies are better off recruiting the trained. Our experience in TalentSprint suggests that flipping this switch significantly improves productivity of IT companies, by slashing recruitment and induction costs by 80 per cent and accelerating time to billing by 70 per cent. It is the result of building talent supply chains.

> dmurali@thehindu.co.in