We hire close to 20,000– 25,000 people every year globally and we would get 15,000 to 16,000 of those reasonably easily, but 10,000 of them we would really struggle for. So, there is a mixed answer on whether or not we are able to find the quality and quantity of people we require for our business. There are some basic skills that we need, which we are able to find, but when looking for expertise in a certain area, for example, someone who can communicate well or someone who has a domain experience, we typically struggle because the education system, which most entry level hires have gone through, has not taught these practical skills. Therefore, that is the gap and that is what we have to work upon a lot. To address this, we have a number of programs called ‘Gateway of Make Programs’ where we work towards up-skilling people before they are actually passed on to a particular business within Genpact. These programs are typically 4-6 weeks long, which all entry level hires go through before they can be productive on the job. This year, we will be running these programs for about 3000 people.
At Genpact, for every 100 people who apply to us, we hire between 4 and 5 and we have a massive number of people applying. Our challenge today is that instead of hiring 5 from those who apply, we need to hire 6 or 7 people. And so, we go slightly deeper into that pool of applicants. Hence, while all of these 100 people are fresh, the question is really at what point we make that cut-off on the skills. For example, at present instead of keeping the cut-off at the best 5, we are going into the next 40 percent as well. Thus, the 6th and the 7th hire are those where we have to spend between 4 to 8 weeks in training them in order to deliver on our entry level needs. Further, per candidate the money investment is between USD 1000 and 2000.
To address the macro concern of this prevailing skill gap, we work very closely with NASSCOM, and have been the driving force behind establishing the curriculum that they are rolling out in many districts and states across the country. This allows third party training companies to certify people on a certain level of skills so that companies like ours can hire them. Further, for the 4,000 to 5,000 people that we are hiring for the ‘Gateway to Make Initiative’, some of them have been hired through third party partners. With NSDC encouraging entrepreneurs to enter the skilling field, a lot of companies are entering the space. Thus, there are three models in play here. One model is that we hire and train the person ourselves completely the second model is that a partner hires and trains the person and we take the person in when he/she has successfully completed the course and the third model is that the person is studying in a college/university, which is actually training the person. We have taken a stride in doing it ourselves and through third party partners. We are also starting the process of working with institutes, whether they are MBA institutes or colleges, and I believe this whole piece will accelerate with the new 5 Year Plan that will promote vocational education. A lot of this vocational education caters to the skills we need. For example, in analytics, we hire people with the domain knowledge, but we still have to train them. We are also planning a joint MBA program with a leading MBA school to launch a program in financial analysis. And these institutes are as hungry as us to make these programs work, because they also realize that it makes sense to prepare people for specific careers, as it will increase the market value of their own students and help them attract students.
Further, there is a need for colleges and universities to identify how they can incorporate a curriculum that will help prepare students for the skills that the industry requires. Active internships in the education programs can provide people hands-on experience in the job even while they are studying. Thus, there is a need for the apprenticeship model to become active. Unfortunately, a B.Com graduate today is unable to handle accounts payable, because the B.Com curriculum does not expose one to an actual bill or the process. So, while they understand the theory, they do not necessarily understand the practicality of accounting and therefore, the need for vocational education to make them productive on the job.
One of the differentiators at Genpact is that the people who we invest in through training and help them actually reach their potential, tend to be more loyal. Historically, Genpact has taken pride in its ability to train and develop people to grow their careers. If you look at our business model, our compensation targets the median of the market. We do not aim to be market leaders in compensation. However, we are very clear that we want to be the market leaders in the overall power of the employment offer, which in addition to compensation, includes the quality of work that we provide, the quality of training and career development that we provide, and the quality of management teams that people work with. We have clear guidelines and policies to measure ourselves against our commitment to train and develop people to ensure their career growth. For example, we have a 70 percent target for filling all internal new roles above the entry level through internal promotions. This allows people to see their careers grow and develop, and that for a population that is hungry for growth and learning, is a significant attraction to stay on. Having said that, our attrition numbers are clearly far better than the industry, so we are clearly the market leaders from the retention view point. But even this 20 percent attrition is far too high for us and our clients we serve, when compared to other industries. Therefore, our target is to continue to bring that down by reinforcing training and career development. Our objective in being in the median of the market in compensation is not to save that money, but to reinvest it in the training that we provide to our associates.