Professional Documents
Culture Documents
:INTRODUCTION SUMMARY:
The era of skill-based workers has arrived but if India wants to truly move to the global
arena, it has to spruce up its workforce. Small may be beautiful, but not in the IT industry. In
the knowledge era and a skill-based economy, it has become imperative that human resources
become one of the most essential ingredients of success. The growth of IT companies
worldwide depends on its people and the intellectual capital it possesses.
Knowledge workers has become a buzzword in todays IT scenario. And if we look at the
top software exporters, they have been growing phenomenally in workforce strength. To
make it big in the global software market, India needs to increase its mass of knowledge
workers. The establishment of Indian Institutes of Information Technology is definitely a step
ahead in the right direction, but what the industry needs is experts in niche areas, in other
words, persons with domain expertise. In the era of cutting-edge technologies, it is this
skilled workforce that will make all the difference.
The total human resource strength of the IT industry as a whole stands at 425,609.
The life has become quite fast and speed of provisioning of different services has also
increased. But all this activities are being managed by number of well qualified professionals.
They may be from computer hardware developers, software engineers or marketing
managers. As the things are running fast, so they have to be managed fast.
This fastness of services and higher level of education/training standards are not easy to
manage by the organizations concerned. As we already know that Human Resource
Management of the organization deals with the individuals putting their hard work to meet
the organizations goals. Managing people is the toughest element of any organization than
land, machinery or finances. Every human being has its own degree of preferences, likings
and attitude. So, an HR manager has to take care of all these things in mind while dealing
with the number of people working in the organization.
RECENT TRENDS OF HRM IN IT SECTOR
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Hence, the IT industry has been devising newer Personnel Management/ HR techniques,
which specifically meet the needs of IT industry. The main reason for this is high standards of
education and professional training required for this industry. Secondly, there is an excessive
job demand for developed countries in this sector and high wage standards.
So, HR managers mainly in developing countries like India find it very difficult to retain and
recruit their manpower. An HR manager worldwide has devised handsome compensation
methods like Profit Sharing, Employee Stock Option Schemes ESOP etc. Though over the
period few schemes has flopped like ESOP due to heavy fall in company share price
:CHAPTER-1INTRODUCTION:
RECENT TRENDS OF HRM IN IT SECTOR
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Success of every business enterprise depends on its human resource. Money, material and
machines are inert factors; but man with his ability to feel, think, conscience and plan is the
most valuable resource. At the same time, human elements are most difficult to be inspired,
controlled and motivated. The upcoming competition in India will demand high motivational
level of its employees.
Growth of an enterprise is vital for the economic development of the country. This is possible
only by maintaining the enthusiasm and motivation of the employees, which is vital for
carrying out the operations in most efficient manner. The most successful companies, all over
the world have designed their business policies to achieve higher productivity by using
potentiality and strength of people.
The basic aim of human policies is the genuine concern for the people. Proper design of
human policies is based on the higher responsibilities, personal and positive approach in the
total perspective of organizational interest. The world's best companies have established their
strength with their people. The employees identify themselves with the company they are
working for. This also helps in building up their spirit, morale and espirit-de-cops that
becomes strength of the company.
Finding the right man for the job and developing him into a valuable resource is an
indispensable requirement of every organization. Human resources are capable of
enlargement i.e. capable of providing an output that is greater than the sum of the inputs.
Proper recruitment helps the line managers to work most effectively in accomplishing the
primary objective of the enterprise. In order to harness the human energies in the service or
organizational goals, every manager is expected to pay proper attention to recruitment,
selection, training, development activities in an organization. Thus, personnel functions such
as manpower planning recruitment, selection and training, when carried out properly, would
enable the organization to hire and retain the services of the best brains in the market.
The human resource management is very crucial in respect of information technology
services than other manufacturing or marketing enterprises. The IT services are technical in
nature and at every stage, the human touch is involved. Hence, it is well-motivated and
devoted manpower which is very much essential for the success of IT industry.
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1.3 LIMITATIONS:
RECENT TRENDS OF HRM IN IT SECTOR
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ROLE OF HR MANAGERS :
Traditionally, the role of the Human Resource professional in many organizations has been to
serve as the systematizing, policing arm of executive management. In this role, the HR
professional served executive agendas well, but was frequently viewed as a road block by
much of the rest of the organization. While some need for this role occasionally remains you
would no want every manager putting his own spin on a sexual harassment policy, as an
examplemuch of the HR role is transforming itself. The role of the HR manager must
parallel the needs of his changing organization.
Strategic Partner:-In todays organizations, to guarantee their viability and ability to
contribute, HR managers need to think of themselves as strategic partners. In this role, the
HR person contributes to the development of and the accomplishment of the organizationwide business plan and objectives. The HR business objectives are established to support the
attainment of the overall plan and objectives. This strategic partnership impacts HR services
such as the design of work positions, hiring; reward, recognition, and strategic pay;
performance development and appraisal systems; career and succession planning; and
employee development.
Employee Advocate:-As an employee sponsor or advocate, the HR manager plays an integral
role in organizational success via his knowledge about and advocacy of people. In this role,
the HR manager provides employee development opportunities, employee assistance
programs, gain sharing and profit-sharing strategies, organization development interventions,
RECENT TRENDS OF HRM IN IT SECTOR
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INNOVATIVE PRACTICES IN HR :
The Innovative Practices in Human Resources study uncovered 12 practices that are reducing
HR costs and improving service quality to employees. Key findings from this research
included the need for HR managers to streamline processes, lower overhead costs, and enable
their departments to advance from transactional organizations to strategic partners in the
business.
Practices and technologies include:
HRIS systems
Employee self-service
Kiosks
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Outsourcing
HR TRENDS IN IT INDUSTRY:
HR IT SCENARIO:
The web is altering the HRD landscape beyond recognition. The key to corporate success in
the fast changing information era is thinking on your knees.
What is this thinking on your knees? Normally as the HR person you know what the
situation is and operate from there. A repositioning is required in your decision process with
questions like why, how and when and not just what. At this point you operate on your knee
i.e. with far more dynamism and with a lot more effectiveness than thinking on your feet.
The employees are like gypsies, on the move all the time. They camp at some location,
enhance their skills, responsibility levels and move on. This is particularly true of the
professional from Software Industry. Opportunities are plenty and the next job opening is
only a mouse click away. The question is not about what else you can do to retain an
employee but it is about making him productive, while he is with you. The value addition will
then happen for both the employee as well as the employer resulting in a win-win situation.
This means that the new strategy calls for the recognition that no employee is expected to be
permanently with you. Normal tenure in any organization is likely to be between two to three
years.
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do not matter. Successful business organizations have no choice but to promote the
performers and let non-performers go.
Organizations recognize that that their ability to gather, manage, analyze, distribute
information and transform themselves into a learning organization will provide continuity
and ensure for them their leadership role. Systematic organizational learning should be
central corporate philosophy. Learning must be obviously followed by changes, which may
not necessarily be welcomed by veterans in the organization. But change is the only
constant for guaranteed success.
Points to note: The following points are important and must be properly understood.
People have a great deal of informational knowledge to contribute to the organization.
People are responsible
People desire opportunities to effect change, not just being expected to change.
Organizations need to create awareness amongst their employees about their vision and then
empower them to act on that vision.
Plan and create short-term win targets reward employees and recognize
achievers.
Corporate goals must factor in individual career growth and personal growth
must be tied to corporate growth and vice versa
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4 Rs of HR in IT:TABLE:
Recruiting Retaining
Retraining Restructurin
Signing bonus
Retention bonus
Job rotation
Finders Fee
Project pay
Team
Broad
assignments
descriptions
Skill inventories
Flexible
Alumni
Reduct FTE/same
connections
pay
g
job
compensation
Non-techs
Telecommuting
Students
Externs
Competency
programs
development
Flexible jobs
Certification
Interns
Job sharing
Recognition
Positive
problem-
solving spirit
programs
OBSTACLES
Timing
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Demographics
RETENTION FACTORS
1. Quality of boss
2. Direction of department
3. Exposure to new technologies
4. Confidence in the company
5. Job security.
Attract, retain and reward the best performers (Encourage all to be the best)
Increase flexibility
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THE CRISIS
Shortage of IT workers
COMPETITION
Alternatives outsourcing
RETAINING
Work environment
Communication forums
Telecommuting
Flexible staffing
Exciting projects
PRACTICES
Focus on value
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Stakeholders partnerships
DEVELOPING
Internship programs
Training programs
Career development programs
Understand people
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Innovative
Co ordinate approach
Career development
OUT SOURCING:
In the last few years, more and more companies around the world are looking towards India
for outsourcing their software requirements. The changing business environment is
demanding new applications. In particular, the spread of client-server computing in
decentralized organizations involves the development of applications specific to a user's
business.
Outsourcing is becoming a strategy for forward thinking IS managers. It is no longer just a
means for reducing costs, but a tool for adding value to business. It enables organisations to
concentrate on their core business, carry out business re-engineering and provide information
that is valid, timely and adequate to assist decision making at the management level and
quality and cost control at the middle and lower levels.
As a result, outsourcing has gradually grown beyond the traditional idea of "having a third
party running the data centre". It has come to mean, "any use of an outside contractor to
replace or extend in-house resources".
Outsourcing is closely linked with corporate strategy, since it must support the organizations
major initiative in using IS. It should enhance and add value to the business. A rule of thumb
to start and gain experience is, "if IS low cost and of high value addition, keep it within the
organization, i.e. in-source. If IS high cost and of low value addition, consider outsourcing".
RECENT TRENDS OF HRM IN IT SECTOR
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In the past few years, whenever organizations around the world have outsourced to India, the
Indian software companies have substantially helped to cut costs in software development
projects or MIS environments, while maintaining high quality. Moreover, all these cost and
quality advantages are coupled with the use of state-of-the-art technologies.
In 2004-05 more than US$ 2500 million worth of software development work was
outsourced to India (The total software exports from India during the year was US$ 4085
million). This was 56% higher than outsourcing orders in 2003-04. It is estimated that the
quantum of outsourcing may jump to US$ 5 billion and reach as high as US$ 10 billion by
2010 A.D.
The employees may cash out after vesting in the program or when they leave the
company. The amount they may cash out may depend on the vesting requirements.
STOCK OPTIONS :
Stock Options:The right to purchase stock at a given price at some time in the future .Stock
Options come in two types:
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1.Incentive stock options (ISOs)in which the employee is able to defer taxation until the
shares bought with the option is sold. The company does not receive a tax deduction for this
type of option.
2.Nonqualified stock options (NSOs ) in which the employee must pay income tax on the
'spread' between the value of the stock and the amount paid for the option. The company may
receive a tax deduction on the 'spread'.
How do Stock options work? An option is created that specifies that the owner of the option
may 'exercise' the 'right' to purchase a companys stock at a certain price (the 'grant' price) by
a certain (expiration) date in the future. Usually the price of the option (the 'grant' price) is set
to the market price of the stock at the time the option was sold. If the underlying stock
increases in value, the option becomes more valuable. If the underlying stock decreases
below the 'grant' price or stays the same in value as the 'grant' price, then the option becomes
worthless.
MERIT PAY :
Merit Pay is an incentive plan implemented on an institutional wide basis to give all
employees an equal opportunity for consideration, regardless of funding source. The merit
increase program is implemented when funds are designated for that purpose by the
institution's administration, dependent upon the availability of funds and other constraints. .
GAIN SHARING :
Gain sharing is a technique that compensates workers based on improvements in the
company's productivity.
How does Gain sharing work? A Company shares productivity gains with the workforce.
Workers voluntarily participate in management to accept responsibility for major reforms.
This type of pay is based on factors directly under a workers control (i.e., productivity or
costs). Gains are measured and distributions are made frequently through a predetermined
formula. Because this pay is only implemented when gains are achieved, gain sharing plans
do not adversely affect company costs.
RECENT TRENDS OF HRM IN IT SECTOR
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Calculate gain in hours: The actual hours worked minus the expected hours (for the given
PROFIT SHARING :
Profit Sharing is an incentive based compensation program to award employees a percentage
of the company's profits. How does Profit sharing work? The company contributes a portion of its
pre-tax profits to a pool that will be distributed among eligible employees.
The amount distributed to each employee may be weighted by the employee's base salary so that
employees with higher base salaries receive a slightly higher amount of the shared pool of profits.
Generally this is done on an annual basis How to Choose an Employee Stock Plan for Your
Company:-Many companies we encounter have a pretty good idea of what kind of employee
ownership plan they want to use, usually based on specific needs and goals.
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tools in hiring and assessing employees to developing high potential talent, creating a
strong leadership bench and work on a robust succession planning strategy, talent
management will become an empirically substantiated document for the business and HR
leaders to retain people and curb knowledge transfer outside the organisation.
The role of the Human Resources Department has changed dramatically over the past 30
years and will become increasingly more strategic in nature in the future, said a leading
light of the HR community in the recent 2006 Annual Conference and Exposition of HR
practitioners in Washington, DC.
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industry have demonstrated the above factors as they are able to carry out the projects with
persons of any background and levels of attainment, but with a few months training either
prior to employment or a short training during probation.
Even those software professionals, who are offered good financial packages, spend their
earnings on expensive lifestyles, vehicles, and credit card syndrome and find themselves
disenchanted on all fronts including the intellectual front. It should also be a cause for
concern to project beyond the present software boom as to what happens to all these if the
opportunities decline. The scenario appears to be quite fluid with a predominant western bias
in all the activities concerning software profession with scores of Indian boys getting lured
and sucked into the vortices created by the opportunities in this area.
ii.
iii.
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SIGNIFICANCE OF STUDY:
Optimum Utilization of Human Resources
Healthy work environment Due to study of HR trends in IT Industry we find the
deficiencies and helps in creating the healthy working environment. It helps to build
good employee, relationship so that individual goals aligns with organizational goal.
The study focused on the information technology community and how works
processes and activities could be better organized to remove artificial barriers and
improve organizational effectiveness, a process often associated with the term
"reengineering.
Recruitment process - Aptitude tests could be conducted by reputed institutes like IITs/
private organizations/HR agencies for prospective professionals preferably ``on-line'' like
GRE, GMAT etc. or physically at regular intervals and scores are given.
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(A)Types of research
Types of Research selected for this project is EXPLORATARY .In exploratory research
design we focused the objective of the study, method of data collection and then select the
sample. After collection the data we analyses and at last interoperate the final result & finds
the best solution of particular problem. In Quantitative research is based on the measurement
of quantity or amount. It is applicable to phenomena that can be expressed in terms of
quantity
- 20 respondents.
Sample Unit-Employees were selected among the executives and staff working in various IT
organizations.
Sampling Area-Malad to GoregoanIT sector
Sampling Technique - Random Sampling technique.
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Secondary data has been used from various internet sites such as motorola.com &
google.com has been used.
FINDINGS:
As per the survey result Indian IT sector feel different HR needs.
New compensation techniques in Indian IT Industry are giving positive effect.
Employees Grievances are not properly handled in these Industries.
Good relationship between employee and employer in Indian IT Industry.
Indian IT companies are unable to retain its employees due to most attractive avenues
outside.
Excessive competition in Indian IT sector is harming the overall long term prospects of
employees in this sector.
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What employees perceive about the emerging HR trends of the IT organisation has been
measured.
To measure the success and failures of emerging HR trends of Indian IT Industry a structured
questionnaire is prepared for this purpose.
The questionnaire included both open ended and close-ended questions. The questionnaire
used is placed at Appendix "I".
The procedure adopted for data collection
was interview
randomly
selected from IT organization to the extent possible and also through mail. .
The main features of the employees randomly selected sex-wise, education-wise and type of
functions wise has been provided here in the succeeding paras.
The 54 per cent of the respondents were Male and 46 per cent of the respondents were
Female
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Interpretation The respondents were asked to comment upon whether Indian IT Industry
needs a trade union or managements are looking after the employees interest in the best
possible manner. The largest 57 percent of the respondents view that there should be only
welfare association in Indian IT industry. 21% need no trade union and 13% like single trade
union only. 9 percent of the respondents opted for multi trade union.
2.
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3. Whether IT industry can afford old traditional trade union methods of agitations
like Strike or Gherao etc.?
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No (28%)
No comments
(05%)
4. What the HR managers of Indian IT sector should do to increase the retentivity rate
of its employees?
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5. The most of the employees of Indian IT sector or highly educated and sensitive in
nature. Moreover, the opportunities outside are very attractive, Whether Indian IT
Industry is able to retain its employees?
No (23%)
No comments (16%)
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Interpretation: The most of the employees of IT sector are highly educated and sensitive in
nature. Moreover, the opportunities outside are very attractive, whether Indian IT Industry is
able to retain its employees was the next opinion query from the randomly selected IT
industry employees. 61% of the employees view that Indian IT companies are unable to retain
its employees due to most attractive avenues outside. Only 23% viewed that they are able to
retain the employees.
Poor (14%)
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relationship is not very encouraging. 58 percent of the respondents has graded it very good
and above. While 42 percent consider it satisfactory and below. The employment of modern
technology requires more positive and effective relationship between management and the
employees. Indian IT Industry has very effective employee employer relationship.
No (48%)
No comments (9%)
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Interpretation: It has been found that in many organisations the management ignores the
employees welfare for their profit sake and does not give proper attention towards
employees career and prospects. What is the state of affairs in IT Industry in India was
quizzed from our valued learned respondents. The results are mixed one. While 48% of the
respondents' replied in negative and 43% gave a positive reply. So, there is a profit motive
operating more than employees proper welfare management in Indian IT Industry
8."The grievances of the employees in Indian IT sectors are handled properly". To what
extent do you with this statement.
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grievances
handling
were to comment upon the positive hypothesis that grievance handling is done properly in
the IT organisation. The five choices provided were strongly agree, agree, no comments,
disagree and strongly disagree. Only 12 respondents strongly agree to the statement and
similarly a small number of 9 respondents strongly disagreed with this. Only 14 percent have
nothing to comment. 39 percent agree that the grievance handling IN Indian IT industry is
done properly and remaining 26 percent disagree with it.
9. Whether you feel that HR needs of Indian IT sector is different from old HR
practices?
No (23%) no comments
(8%)
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SUGESSATIONS:
It is found that in these Industries employees grievance are not properly handled so
for retaining the employee first of all employee grievance are handled.
RECENT TRENDS OF HRM IN IT SECTOR
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Indian IT Industry want that they provide the attractive avenues to its employee for
retaining good employee.
Provide the training & development program time to time to employee for meeting
the competition.
The main problem of Indian IT sector is hoe they retain the employee , so Indian IT
sector want that they provide the job security to employee.
CONCLUSION:
It can be concluded that Emerging HR trends of Indian It industry are quite different
from the old economy industry.
India is considered one of Super Power in Information Technology and allied fields.
Majority of world leaders in IT sector are outsourcing their requirements from Indian
IT Industry and recruiting Indian IT professionals.
The Indian Government must allow the Industry to meet international competition and
desired environment in respect of Labour Laws and financial rules must be liberalized
for this Indian IT Industry.
HR managers in Indian IT Industry must keep the sensitive nature of IT professionals
and state of greater opportunities outside in mind for devising HR policies for their
organization.
China is also entering this area vigorously and Government of India must help Indian
It industry to meet this challenge.
:B I B L I O G R A P H Y:
BOOKS REFERENCE:
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Burack, E.R. & Mc. Nicholos, T.J. Human Research Planning: Technology, Policy and
& Change, The Comparative Administration Research Institute of the Centre for
Business and Economic Research, College of Business Administration, Kent State
University, 1973.
Kothari, CR." research Methodology Methods and tech- niques", Wiley Eastern
Limited.
Websites Reference
www.google.com
www.wikipedia.com
www.investopedia.com
www.kml.com
www.businesslink.gov.com
www.altavista.com
www.yagoohoogle.com
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