To smother staff unrest, Infosys will tweak HR plan

In October last, Infosys Technologies, one of India’s best employers, implemented a new ‘career architecture’ called iRace.
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The idea was to tune the career path of employees to industry needs of higher technical depth to cater to today’s customers.

iRace essentially is about keeping staff in technical roles for longer durations before moving them into managerial roles.
It did not go well with staff at all, and it showed: attrition levels rose in the company.

Infy lost around 1,000 people in February alone, which, the company’s human resources head TV Mohandas Pai admitted, “was partly due to iRace and partly due to current job market conditions”.

But the alarm bells have gone off since at India’s No.2 company.
“We set up a working group to look into the issue (of iRace) and it has come up with some recommendations. These are being considered by us (Infosys management) currently,” Pai said.

Nandita Gurjar - senior vice president and global HR head of Infosys, said, iRace was required as the company’s service offerings had changed drastically since 2001-02.

In the early 2000, 80-90% of the IT vendor’s business constituted of application development and management (ADM).

That has today shrunk to 48% while 50% of Infosys’ business constitutes of new business lines.

In an article on the Infosys website, she writes: “We had moved into different geographies, different subsidiaries and we were force-fitting our employees into a career structure or a role structure which was largely ADM-based.”

So, against the earlier norm of a project manager having 4-5 years experience, the company decided that managers need around eight years of experience.

Employees felt this will slow down their growth.

A note by institutional brokerage CLSA Asia-Pacific Markets early this month said iRace had led to 4,000 people leaving the organisation in February.

However, this wasrefuted by both Pai and Nandita.

“It (4,000 resignations) is figment of someone’s imagination. In February, 1,000 people left us voluntarily. That is normal rate of attrition and slightly up from last quarter (December),” said Pai.

Nevertheless, company sources said Infosys’ attrition rate is expected to move up to 12.9% in the current quarter from 11.9% in the last quarter.

Attrition in the June-September 2009 quarter was lowest in the last eight quarters at 10.9%.

Attritioin had peaked to 13.9% in the June quarter of 2007.

In order to check the decline, Gurjar said Infosys was trying to remove misconceptions among staff regarding iRace.

“We trying to slowly communicate to them that promotions would continue based on the role maturity, number of years and performance of an employee. It would also be based on the growth of our business,” she said.

She said the management had received suggestions from the working group but it “had not closed on them.”

Vipin Khare and Gaurav Rateria, analysts with Morgan Stanley, in a report brought out last week said they viewed iRace “as more positive than negative.”

“Infosys would be the only company to have rationalised its workforce in the range of 2-10 years of experience leading to higher margin cushion compared to its other two large peers (Wipro and Tata Consultancy Services),” Khare and Rateria said.