Article: Cost of talent needs to keep pace with productivity: V. Laxmikanth

C-Suite

Cost of talent needs to keep pace with productivity: V. Laxmikanth

V. Lakshmikanth, Managing Director, Broadridge, Financial Solution
Cost of talent needs to keep pace with productivity: V. Laxmikanth
 

There is a need to educate the industry to invest on building expertise, skills and depth

 

The Indian industry has been active for over 20 years, and over time we have built a great amount of depth in terms of our systems and processes, and not just in terms of number of people. The maturity level of the business and process of off-shoring in India, being an early mover, is so in-depth that it is not easy for other countries to replicate. It will take time for others to surpass India’s potential for scale in business. The industry has undergone change through series of trying times as a result of the US downgrade and recession. In fact, as global challenges increase, companies will seek to cut costs even more, and that is the opportunity for the Indian IT/ITeS industry.

We operate in an open market which has many attractive propositions. Every location has its own advantage and disadvantages. While, the pie is big enough for all countries to pick their own piece from, the Indian IT industry (i.e. the software and maintenance) have been in operation since 1980s and we have the advantage of mid-level talent who have an average expertise of 15 years which is far beyond that of other countries.

India’s challenge is that the cost of talent needs to keep pace with productivity. There is a need to educate the industry to invest on building expertise, skills and depth. Unfortunately, we are witnessing a shortfall in talent leading to a spiraling wage bill. There is a need to move away from the people-centric model to a more product-centric model. And growth must be seen not in terms of number of people alone, but the value contribution of individuals to productivity and revenue.
There is a need to start moving towards a value-based business model. The business model innovation would include innovation in terms of its people, processes and technology. How each can be modeled will depend on the where the company stands in its maturity curve.

In the long term, the model will be about talent and IT will become more of a utility. There needs to be a mindset change in companies to make at least 5 % of its talent world class experts. And therefore, there would need to be more investment on such people with a commitment from both the company and the individual. Those companies that will differentiate and create 10x people in the future will stand to gain.
 

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Topics: C-Suite, Strategic HR, #ExpertViews

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