July 17, 2012 Category : Careers & Training
BANGALORE: SD Shibulal, Infosys' chief executive, is fond of saying that the company is running a marathon, not a sprint. But for many employees, this emphasis on endurance rather than speed is simply too much to bear. So, instead of joining their leader in running the long slog, the exit gate is presenting a tempting prospect.
Data on attrition rates-which show how many employees have left the company-as well as conversations with current and former staff show that Infosys is having trouble with its most important resource: people.
The indications are that the rank and file, unmindful of the company's past generosity or promises of a bright future, is restless and hostile because of a wage freeze and continuing underperformance.
The sour mood was exacerbated on Thursday when the company announced lower-than-forecast sales and lowered its target growth rate to about 5%, less than half as fast as the wider industry. The same day, rival and India's top software exporter Tata Consultancy Services met earnings expectations and seemed to suggest that the market was not as bad as Infosys makes it out to be.
"Why the hell is TCS doing so well and not Infosys?" asked a former employee who claims to have had a sterling appraisal.
Top management unconvincing
The Infosys employee, who claims to have had a sterling appraisal, felt dejected when she got to know in April that employee salaries would stay at current levels because business prospects were not too good. After four years at Infosys, she left the company a few weeks ago to join a rival IT services provider on a 40% higher salary.
Until a few years ago, an Infosys badge was the ultimate possession for those looking to make a career in the software industry. Its founding in 1981 with Rs 10,000 raised by NR Narayana Murthy by selling his wife Sudha's jewellery is the stuff of legend, making the company synonymous with an India whose fortunes and self-confidence were on the rise. For decades, while the going was good, even drivers became millionaires with their stock options and variable salary payouts were rarely lower than 100%.
For Ashish (not his real name) from Jharkhand, the Infosys story persuaded him to study hard so that he could leave a rural backwater and fulfil his ambition and his parents' dream of finding a job at the Bangalore-headquartered company. After two years at the company and the frustration of watching Infosys lose ground to competition, he is convinced that he made the wrong choice. Infosys, for him, is nothing like the company of his imagination. He thinks it is tired, and the top management unconvincing about the direction in which the company is headed.
"Everyone around talks about leaving as soon they get a better offer," he said.
On the face of it, the 14.2% attrition rate at Infosys, which employs 1.5 lakh - equivalent to the population of towns such as Almora or Sivakasi, is not alarming. But more than 8,000 staff resigned in the three months to June, which is one-third more than in the previous quarter.
The Infosys top brass have said most of them are leaving to study, normal during this time of the year, but the danger signals are unmistakable.
While discontent among the rank and file is most acute, many in senior and middle management may be sticking around only because their options are limited and they don't know how green the grass is on the other side after years at Infosys.
For delivery managers, too, job openings at rival IT services companies are few and far between; it is e-commerce and software product companies that are recruiting the most.
Even the 20,000 promotions that Infosys has rolled out have caused heartburn. Because they come with an increase only in variable pay, those who have been promoted believe they will not get any extra cash because the company is not doing well.
A bright spot has been the business process outsourcing unit, which has outpaced the parent on almost every parameter. Most of the 23,000 staff at Infosys BPO will receive a salary increase, but the organisation does not seem keen to publicise the good news.
Swami Swaminathan, the chief executive of Infosys BPO, is of the view that employee reactions can be momentary, swaying from ecstasy to despondency, but the company's mission is a long-term one.
"The fact is that these are challenging times and test the character of an organisation. Leadership has to ensure that employees feel engaged," he said.
While employee loyalties may indeed be fickle, the fact is that Infosys' reputation as an employer of choice could be in jeopardy. Already, a Bengal-based engineering institute is thinking of bumping Infosys off the coveted 'Day 1' slots, where the best talent is on offer, because of persisting bad news from the company.
At the same there are others who, like Infosys, are willing to play the long game. At RV College of Engineering in Bangalore, Principal BS Satyanarayana believes that ups and downs are a part of everyone's life, even the lives of companies. "We like Infosys. We will not succumb to the numbers game," he said.