Amit Sharvmmmmma-0336-Human Resource Issues and Challenges in Software Indust

7/29/2019 Amit Sharvmmmmma-0336-Human Resource Issues and Challenges in Software Indust.

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HR ISSUES AND CHALLENGES IN SOFTWARE INDUSTRY IN BANGALORE

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M P BIRLA INSTITUTE OF MANAGEMENT Page 1 of 72

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DECLARATION

I hereby declare that the dissertation entitled Human Resource and

Challenges in Software Industry in Bangalore is the result of research

work undertaken by me under the guidance and supervision of

Dr.K.V.Prabhakar, Adjunct Professor, M.P.Birla Institute of

Management, Bangalore.

I also declare that this dissertation has not been submitted to

any other University/Institution for the award of any Degree or

Diploma.

Place: Bangalore

Date: 15th

June 2005 (Amit Sharma)


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Certificate

I hereby certify that the research work embodied in this

dissertation entitled Human issues and challenges in software

industry in Bangalore, has been undertaken and completed by

Mr. Amit Sharma under the guidance and supervision of

Dr. K. V. Prabhakar, Adjunct professor, MPBIM, Bangalore.

Place: Bangalore

Date: 15/06/2005 (Dr. N. S.

Malavalli)

Principal MPBIM,

Bangalore


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Certificate

I hereby declare that the research work embodied in this

dissertation entitled Human issues and challenges in software

industry in Bangalore, has been undertaken and completed by

Mr. Amit Sharma under my guidance and supervision

Place: Bangalore

Date: 15/06/2005 (DR.K.V.PRABHAKAR)

Adjunct Professor


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Acknowledgement

I take this opportunity to sincerely thanks Dr. K.V. Prabhakar , Adjunct

Professor M. P. Birla Institute of Management , Bangalore who guidedme to complete this research work which is going to be instrumental inshaping my career in HR field.

I thank Dr. Nagesh. Malavalli, Principal M. P. Birla Institute ofManagement for providing a congenial atmosphere to facilitate the

completion of this research work

My sincere thanks to my parents and friends for helping me in

completing this research work.

Place: Bangalore

Date: 15th

June 2005 (Amit

Sharma)


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CONTENTS

SERIAL

NO

PARTICULARS PAGE

NO

EXECUTIVE SUMMARY

Chapter-1 Background of the Study 1

Chapter-2 Review of Literature 5

Chapter-3 Problem Statement,

Research objectives,

Research Limitations.

13

Chapter- 4 Research Methodology 15

Chapter- 5 Data Analysis and Interpretation 17

Chapter- 6 Major Finding of Research 51

Chapter-7 Recommendations 52

Chapter-8 Directions For Further Research 58

ANNEXURE

Select Bibliography

including and

Websites used

59

Interview Schedule 62


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LIST OF CHARTS

CCHHAARRTT NNOO:: PPAARRTTIICCUULLAARRSS PPAAGGEE NNOO..

1 Growth of Indian IT Industry 17

2 Software Export to total Export 18

3 Software and Service Exports Vs Software

Industry20

4 Indian Software Industry 21

5 Growth of IT-ES 22

6 Pressure on Software Professional 28

7 Stress suffered by Software Professionals 29

8 Effect on working for long hours 30

9 Working in Teams 31

10 Traditional versus Managerial growth 32

11 Problem of Attrition 33

12 Short Supply of Professionals 34

13 Difficulty to attract the best talent 35

14 Effects on Compensation

3615 Annual Demand of IT professionals 49


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EXECUTIVE SUMMARY

Software organizations are becoming more important for the developing

economy. Bangalore software industry had a phenomenal growth in the

last decade and is expected to play a much bigger role in the coming

years. This growth has been due to availability of highly competent and

cost competitive software professionals.

The aspiration of software professionals have been increasing on

continues basis and they are becoming more demanding. At the sametime IT industry is facing various problems.

This study sought to explore and examine the HR issues and

challenges in Bangalore software industry. During the Research it was

found that the software organizations are facing a number of HR issues

such as difficulty in attracting the best talent, high attrition rate,

unrealistic demand of software professionals, shortage of workforce,

employees suffering from Stress and work life balance.

The software Industry in Bangalore has been a success story till

date, but if it has to continue ensuring robust growth and development it

has to take initiatives such as more adequate rewards, flexi-timings,


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continues training for up gradation of employees, growth opportunities

for employees and such other initiative.

Chapter 1

Background scenario

India the world largest democracy and home of more than one

billion people is quickly emerging as a leader in the field of software

engineering and development. Indian PMs National Task force On IT

& Software Development has set a target of 50 billion U.S. dollars of

annual software exports by the year 2008.During financial year 2005-

2005 Indian software and services exports clock revenue of 17.2 billion

U.S. dollars, registering a growth of 34.7% with total revenue of 22

billion U.S. dollars.

Due to increased government spending towards IT in domestic

market the domestic market revenue has grown up by 24 %(

NASSCOM, 2005).Government of India has directed that 1-3 % of the


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budget of every government department would be towards IT hardware

and software. Microsoft chairman Bill Gates in his visit to India stated

that India will emerge as a software superpower in the coming few

years.

Everybody is projecting and anticipating that India software

industry will play a very vital role in the growth of Indian economy.

However, the projected growth of Indian software industry ability to

manage human resource issues and challenges being experienced by it.

The cost of Indian software professional is increasing by 25-30 percent

per annum. As a consequence, software industries from China,

Philippines, and Singapore are emerging as competitors to Indian

software industry.

Presently, Indian software organizations have been working on

the lower end of the value chain such as providing business solution,

programming and body shopping. For retaining its competitive edge,

Indian software industry has been striving to move up the value chain.

However, moving up the value chain implies working on technology

and product development. In turn, these initiatives require availability of

experienced and more competent software professionals for sufficiently

long period of time. Software professionals with 3 years or more

experience are in short supply in USA" Europe and literally every part

of the world. Indians software professionals having proved their

competence and capabilities are increasingly in demand in USA and

other developed countries. As a consequence, large number of Indian

software professionals has been moving to USA and Europe. US

Government is seriously contemplating to increase the visa-quota for

Indian software professionals.

Projects on the lower end of value chain require many times


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working on legacy systems and technologies of the earlier era. Indian

software professionals aspire to work on the latest technology and

platforms. It is leading to a situation whereby software organizations

exclusively working on lower levels of value chain increasingly find it

difficult to attract and retain competent software professionals.

Thus the growth of Indian software organization in the next

decade will substantially depend upon the ability of the industry to

resolve conflicts emerging from the requirements of the market and the

aspirations of software professionals who can make the growth a reality.

It is in this context that this study explores and strives to explain human

issues and challenges experienced by the Indian software industry

Software Professionals: Some Common Characteristics

Based on the interviews conducted with software professionals andthe way they were described by senior managers, project managers and

HR professionals in software organizations, some common

characteristics of software professionals have emerged and these

characteristics are as follow:

Software professionals invest substantial time, efforts and

resources to acquire relevant and valid knowledge. Over time, the

knowledge acquired by them becomes their self-concept.

Software professionals look forward to use their existing

knowledge and acquire new knowledge on a continuous basis.

This is significant for software professionals to experience a sense


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of growth and nurture their concept of growth.

Software professionals tend to be highly analytical and hence they

expect rationale for every activity. They expect that they should

be involved in defining and planning every organizational change

affecting them.

Software professionals tend to be high achievers and hence they

expect periodical and tangible feed back and recognition for

performance. Since reward system is perceived, as a part of the

feed back system, linking performance with reward and

experiencing equity in reward becomes very important issues with

them.

Software professionals want to work on new technologies, new

platforms and with new organizations to improve their learning

and curriculum vitae.

Software professionals are more committed to their profession

than the organization they work for.

Due to existing demand and supply situation, software

professionals are able to move from their existing organizations to

new organizations in India or abroad rather fast.

Software professionals value autonomy, professionalism and

innovativeness,


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Chapter 2

Review of Literature

PURPOSE OF THE REVIEW OF LITERATURE

The purpose of the literature review is to identify the problem

statement, understand the secondary data that has been gathered in the

field of study and to make new finding on the problem statement

Title : Employees stress and performance

Author : David lee

Creating a high performance organization requires understanding

what factors influence performance. One of the most significance factors


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is workplace stress. Initiatives like the learning organization, process

reengineering, collaboration team work

Title: Developing Human Capital for Sustaining the Growth of

Software Industry

Authors: Narendra M. Agarwal (IIM-Bangalore)

M.R.Rao(IIM-Bangalore)

The growth of software industry till date has been mainly due to

the availability of highly competent and cost competitive software

professional in India. The paper examines the initiatives taken by

various software organizations, central and state government, corporate

private training institutes etc and suggests further measure to be taken

by different agencies.

Title : Innovative Retention strategies for Indian IT industry.

Website: www.google.com

Source : Part One - Articles by Forum Member

Retention of Key employees is critical to the long term health and

success of any organization. It is a known fact that retaining your best

employees ensures customer satisfaction, increased product sales,

satisfied colleagues and reporting staff, effective succession planning

and deeply imbedded organizational knowledge and learning.

Employee retention matters as organizational issues such as

training time and investment; lost knowledge; insecure employees and a


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costly candidate search are involved. Hence failing to retain a key

employee is a costly proposition for an organization. Various estimates

' suggest that losing a middle manager in most organizations costs up to

five times of his salary. The IT industry in India face an enormous

challenge in reducing attrition rate and this being a nascent industry

needs to draw parallels.

Conclusion

It is HR' s job, though not HR' s job alone, to champion and

shepherd effective human resource management practices at both the

strategic and day-to-day levels. That is, to be effective, human resource

management practices must be grounded in two ways. First, they must

reflect company wide commitments as to how it will manage and relate

to its employees. Secondly, HR must implement these commitments so

that the ideals of the enterprise and deeds of its agents are congruent.

HR to play a key role in the development and execution of the

Business Strategy of an Organization. It should evolve from a

transactional support role to partnering in the organization' s business

strategy.

Title: Performance management

Author: Frances Neale

Performance management helps organizations to strengthen their

working relationship with there staff and will be able to maximize there

joint contribution to the long term success of the company. This leads to


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a pattern of growth and achievement, providing good results for the

company and a rewarding and satisfying life for the workers.

Title: When Teams Work Best

Author: Frank Lafasto

Carl Larson

Teams are there every where, in business and industry. The

trouble is that that in a real life, sometimes teams work effectively, but

often they dont. Clarity, confidence and commitment can only

encourage team work and help teams function more effectively.

Title: Managing Employee Retention as a Strategy for Increasing

OrganizationalCompetitiveness

Author: Sunil Ramlall

The author conducted the research at a large, complex

organization using a stratified random sample to select employees from

all departments of the organization and to include non-supervisory

employees, mid-level management, and senior management employees

and came up with the following findings

Potential Factors that could cause the Employee to Leave the

Company

Salary, lack of challenge and opportunities in ones position, and

the inability to advance in ones career were the most significant factors


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for people to leave the company. Other factors identified by the

respondents included lack of recognition, ineffective leadership, and a

work environment that lacked teamwork.

Reward and Recognition

The three forms of recognition and reward most frequently cited

by the respondents were verbal praise from supervisor and other leaders,

salary increases and gift certificates

CONCLUSION

The major conclusion of this study is, if given an option the

employees would leave the company because of low satisfaction level

inter related with salary, work culture and many more things

Title : MAJOR HR CHALLENGES IN THE IT INDUSTRY

Author : R.NELSON

Source : www.humalinks.com

We are at the dawn of the next millennium. The challenges that

we will face in the next millennium can only be anticipated. But the

direction that we will tread is quite clear now.

The IT boom has brought with it, its own set of challenges to

organisations. How to put in place systems and process that are in tune


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with the IT revolution, how to strategise and compete in the IT era?

etc.But a major challenge that the IT industry per se has been facing is

in the field of Human Resource Management.

The IT industry is a service industry. How well are you able to

offer quality service to individuals and organisations will determine the

success of your organisation. This leads us to the fact that the creativity,

innovativeness, knowledge and skill of your employees are your

important assets .How you are able to manage these assets is the

challenge that the IT industry is facing. It is not capital or finance or

marketing management that gives the competitive edge but rather how

well you are able to manage your human resources whose intellectual

applications drive your business.

Some of the HR challenges that the IT industry faces are in Recruitment,

Performance Management, Training & Development, Compensation Management

and HRM as whole.

Title: Balancing Work and Family

Website:www.familiesandwork.org

Family life and work life take on new meanings once a baby is

introduced into the family. Schedules need to be rearranged and in all

likelihood, the division of household duties will come up for

renegotiation more than once. Parenting becomes a team effort.

Achieving balance will mean different things to different families.However, experts offer this advice on managing the dual responsibilities

of being a working mother.


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Get in touch with your values. What do you want from life for

you and your family? How does work fit into this? Is work important for

your sense of self, or is it important primarily for financial reasons?

Set priorities. Based on your values, decide what is important to you.

Be realistic. The mythical "superwoman," a working mother excelling

100% on the job and 100% in caring for her family, is just that a myth.

For most of us, there is always more to do than time allows. Focus on

what you can do. Give up whats not essential. Let a f ew things slide. If

children and work are your most important priorities, stop trying to

maintain a "House Beautiful" home.

Develop a transition ritual. It can take time to shift gears from work to

family. Establish a ritual that helps to mark the end of the workday and

the beginning of family time. Use the commute home to listen to music

or a book on tape. When you get home, change clothes before cuddling

with your baby, or engaging with your toddler. Be consistent in these

routines. The ritual will automatically signal the end of one thing and

the beginning of another.

Investigate your options. More than ever, businesses recognize the

value of being family-friendly. Your company may offer work options

such as flextime, telecommuting, compressed work weeks, or job

sharing arrangements. Check with your Human Resources department

for availability and details, or click to the article Family-Friendly Work

Schedules: A Work/Family Balance Solution listed below in the

Reference Sources. It offers an excellent overview of the most common

full-time and part-time flexible work arrangements. Understanding the


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pros and cons of each will help you decide if any are suitable for you

and if so, how to approach your immediate supervisor about them.

Take care of your physical health. Healthy people have stamina. They

are better able to withstand emotional and physical stress. Dont neglect

your health. Eat properly and get as much sleep as you can. Find time to

do the things that nourish your whole being.

Talk to other working mothers. Other working moms will gladly share

with you how they navigated the passage from working-before-baby to

working-after-baby. They will tell you what worked for them, what

didnt and how they found alternative solutions.

Learn about work and family. Read as much as possible on work and

family issues in magazines, newspapers and on the Internet, and look for

tips you can use. When using Internet search engines, use keywords and

phrases like family, work and family, parenting, work family balance,

career. Youll gain valuable information and find guidance on

developing a plan that works for you, your spouse and your child.

Learn the impact that certain stressors and influences have on work life

and home life. It can help you gain a different perspective on many of

the issues and challenges youll face as a working mother. Parenting at

any stage requires a sense of humor and the ability to juggle many tasks.

Look at all the things going on in your family in a positive light,

have faith that there are ways to make a household run

smoothly; and dont forget to ask for help when you really

need it. Grandparents and extended family are usually

delighted to offer a helping hand. In all probability theyre


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tickled pink to be able to spend time with your oh - so-cute

baby or toddler.

Methodology

Reviews are acquired through websites as secondary data. Also

with the help of professors through interviews and lectures, data has

been furnished. Various publications are also included.

Conclusion

With the help of reviews it has been possible to relate work life balance

with Job stress and the early retirement. Also reviews have given a deep

insight of how employer can influence the lives of employees.


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Chapter 3

Problem statement, Research Objective and Research

Limitations

Problem Statement:

To identify various human resources issues and challenges in the

Bangalore IT industry.

Research Objectives:

This study is positioned as an exploratory study to understand human

issues and challenges in Indian Software Organizations. Specifically, the

study will focus on following specific objectives:

To find what are the human resource problems experienced by the

top management in software organizations.

What are the factors that affect software professionals

professional performance and contributions.

To find the factors that inspires and motivates software

professionals


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Research Limitations

This study suffers from the following limitations:

The research is limited to Bangalore

Since the period of the study is limited, the researcher could not

make an in-depth study

The research is based on the response of the employees

Chapter 4

Research methodology


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Descriptive research design has been used for the purpose of the study.

The ideology of using this research design is that the researcher can

known more about the problem being studied and new ideas can be

generated

Sampling techniques

Random sampling has been used for the purpose of the study so that the

sample could be split into different groups based on the convenience of

the researcher

Sample size

Large, medium and small organizations might have different types of

human issues and challenges .Hence, the study has covered total of 6

organization (total 90 employees) consisting of large, medium and small

organization

Sample procedure

Sample have been selected using random sampling method

Contact method

In-depth interview


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Statistical tools used for analysis

Percentage Analysis

Percentage analysis refers to a specific kind of ratio used in making the

comparison between two or more series of data. Percentage is used to

describe relationship and can also be used to compare the relative terms,

the distribution of two or more series in data

Percentage of respondent= (no. of respondent/total no. of respondent)

*100


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Chapter 5

Data Analysis and Interpretation

Increasingly, Indias vast human, industrial and technological resourcesare being utilised at the global level making India a key player in the

international IT arena.

The advantages and value addition that IT can bring to the industry and

the Government are now becoming self-evident. There has been a

gradual shift towards the use of IT in the Government, Public sector and

Private sector as also in public services and education. One of the major

factors that led to the emergence of this sector was the unrivalled

success of Indias export led software industry.

Contribution to the Economy

The IT industry in India has witnessed a phenomenal growth in the last

eight years, with revenues exhibiting a Compounded Annual Growth

Rate (CAGR) of 42.3%. The Industry has now attained a level of

maturity, wherein, the revenues generated can be viewed as a

dependable source of national income. In terms of contribution towards

GDP, the IT industry constituted 0.59% in 1994-95, which increased to

2.87% in 2001-02, and as per NASSCOM projections, is expected to

grow to 7% by 2008.

SOURCE: NASSCOM

Growth of Indian IT Industry

0

20,000

40,000

60,000

80,000

Rs.

Crore

-0.5

0.5

1.5

2.5

3.5

Percentag

Size 5,450 8,600 13,350 18,650 25,300 36,200 55,550 64,200

Share of GDP 0.59 0.81 1.08 1.35 1.57 2.03 2.81 2.87

1994-

95

1995-

96

1996-

97

1997-

98

1998-

99

1999-

00

2000-

01

2001-

02


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Export Orientation

The Indian IT industry is highly export oriented with export revenues

constituting approximately 76% of the total earnings (year 2001-02). As

per recent estimates, the IT industry has become the largest contributorto Indian exports with a share of 16.5%, which is expected to rise further

to 18.6% in the current fiscal year (2002-03) as highlighted by the

exhibit overleaf.

Source: NASSCOM

IT Industry Segmentation

The IT industry can be broadly defined under two categories:

1) Software and Services - This category can be further divided into

two key segments

a. Software - including Projects (both offshore and onsite),

Professional Services and Consulting, Generic Software

Products (the most successful example being the accounting

Software Exports to Total Exports

18.6

16.5

13.8

10.5

7.72

0

5

10

15

20

1998-99 1999-00 2000-01 2001-02 2002-03*

Percentage


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software - Tally), Training & Development and Support &

Maintenance.

b. IT Enabled Services (ITES) - including back office operations,

data processing, medical transcription, customer contact

centres, digital/ website content management, disaster

recovery storages, HR/ payroll services, insurance and

financial claims management amongst others.

2) Hardware and Peripherals - including manufacturing and assembly of

computer hardware components and peripheral device.

The Indian IT industry is dominated by the Software and Services

category which solitarily accounted for more than 79% of the revenues

generated in the year 2001-02 while the hardware and peripherals

category contributed 21%.

Software and Services

For the year 2001-2002, the Indian software and services industry has

been estimated at Rs.48,134 cr., which is in stark comparison to Rs.300

cr., where it stood a decade back. This fleeting growth is also reflected

in the export earnings that have grown to Rs.36, 500 cr. in 2001-2002

(up from a base of Rs.30 cr. in 1985) exhibiting a CAGR of 56%.

Within the Software and Services category, ITES accounted for 20% of

the revenues generated, whereas, 80% of the earnings originated from

the software segment. To get a keener understanding of the exhibited

market dynamics, it is imperative to enumerate the divergent

characteristics of Software and ITES segments separately.


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The following exhibit traces the growth of software and services over

the years:

SOURCE: NASSCOM

Software SegmentAs mentioned earlier, the software activity in India is a mix of projects,

professional services such as consulting, enterprise resource planning,

software development (products), support & maintenance and training.

Amongst these service categories, majority of the IT units are focused

towards customized software solution development (with 41% of the

firms registered with NASSCOM operating under this segment)

followed by communication and networking software development such

as wireless application protocol (WAP) as highlighted in the exhibit

overleaf:

Software and Services Exports vs Software Industry

0

15,000

30,000

45,000

60,000

Rs.

Cror

Exports 1,53 5 2,52 0 3,90 0 6,530 10,940 17,150 28,350 36,500

Total Industry 2,47 1 4,18 6 6,52 8 11,177 17,122 24,288 38,241 48,134

1994 -95 1995 -96 1996 -97 1997 -98 1998 -99 1999-00 2000 -01 2001-02*


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Source: NASSCOM

Recent times have witnessed emergence of new service lines such as

package software implementation, systems integration, information

systems outsourcing and network management.

IT Enabled Services

Stemming from Indias sustainable value proposition, in the last four

years, the ITES segment has witnessed an impressive growth of 69.5%

(CAGR). Despite the general economic slowdown, this segment

exhibited a growth of 71% in the fiscal year 2001-02. In addition, a

healthy growth of 65% is forecasted for the current year (2002-2003).

As per a Nasscom study, the ITES sector is expected to grow at an

average annual growth rate of 45% in the period 2002-2008 and will

contribute an annual revenue of US $21-$24 billion (Rs 105-120

thousand crores) by 2008.

Indian S oftware Indust ry : Development F ocus

41%

14%6%

14%

10%

15% Application S oftware

Development

Web S olutions

S ys tems Integration

Cons ultancy

S ys tems S oftwareDevelopment

Communication

Networking Software


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Consequently, the ITES exports from India have witnessed a faster rate

of growth in comparison to the exports from the software segment. The

following exhibit traces the growth of ITES exports over the last few

years:

Source: NASSCOM

Growth of IT Enabled Services

0

10,000

20,000

30,000

40,000

Rs.

Crore

ITES 2,400 4,100 7 ,100 11,700

Software Exports 14,750 24,250 29,400 35,800

1999-00 2000-01 2001-02 2002-03*


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IT result for 2004-2005

Indian Software and Services Exports clock revenues of USD

17.2 billion, registering growth of 34.5 % in FY 2004-05

Total software and services revenues were USD 22 billion in

2004-05

Domestic market revenues grow by 24% in FY 04-05

Indian Software and Services exports industry forecast to register

strong growth of around 30-32% in FY 05-06

Sector-wise break-up

USD 2003 - 04 2004 - 05 2005 -

06E

IT software and services Export 9.2 12.0 15.0

ITES-BPO Exports 3.6 5.2 7.3

Domestic Market 3.9 4.8 6.0

Total IT-ITES(IT software and

services +ITES - BPO

16.7 22.0 28.5

Source: NASSCOM


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I.T. Scenario Bangalore

In the last few years, Bangalore has transformed itself from being a

Pensioners Paradise to the Silicon Valleyof India. From mere 13

software units in 1991-92, the units have increased to 1154 companies

as on April 2003.

Reasons for the growth of IT industry in Bangalore

(A) Government Initiatives:

The Karnataka Government offers special assistance, incentives and

concessions for the Information Technology industries which have

investments in fixed assets up to Rs.100 Cr. The explosive growth of IT

in 8Bangalore has been helped in no small measure by the progressive

policies of the Government. Some of the benefits that the Government

offers investors in the Information Technology sector in Karnataka are

listed below.

(B)Entry Tax Exemption

Information Technology industries will be exempt from payment of

Entry Tax on computer hardware, computer peripherals and other capital

goods including captive power generation sets, during implementation

stage which can be extended up to 5 years from the date of

commencement of implementations.


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(C)Power Tariff Concessions

Software industries will be treated as industrial (and not

commercial) consumers and electricity tariff applicable to the

industrial consumers will be levied on such industries.

Software industries, which need electrical power up to 5 KVA,

will be permitted to be established without any local restrictions

and will be made eligible for all incentives and concessions.

As continuous uninterrupted and quality power supply is one of

the prime requirements of sustenance and growth of Information

Technology industries, these industries will be given priority in

the sanctioning and servicing of power. The IT industries will also

be exempt from power-cuts without any time limit.

Captive power generation sets installed by the Information

Technology industry will be eligible for the following incentives:

Total exemption from payment of electricity tax without any time

limit.

(D) Quick Clearances from Pollution Control Board

Karnataka State Pollution Control Board has simplified the procedurefor seeking clearances under the Air Act and the Water Act for the

software companies that use captive DG Sets.


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(E)Concessions on Company Registration Charges

IT companies taking up expansion, diversification, and modernization

get concessions on registration charges.

Other Reasons:

Institution Readily available world class IT infrastructure

Ample of specialized human resources

Pleasant and comfortable climatic condition

Cosmopolitan environment in the city and

High concentration of IT companies and quality research and

Development.


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Contribution of Bangalore IT Industry

Bangalore, the forth-largest technology hub in the world, is continuing

to lead from the front in software export. All the giants in IT sectors

operate from Bangalore.

Leading the pack

Software exports from Bangalore constitute around 36 percent of

the total software technology parks of Indian export 2003-04

Bangalore is fast catching up in the BPO/ITES space and this

segment has registered a 126 per cent growth to touch Rs.2, 237

cr.


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1. Which of the following puts the maximum pressure onsoftware professional?

Pressures on Software Professionals

A

15%

B

34%C

33%

D

18%

Source: personal enquiry notes

INTERPRETATION

A-Organizational Expectations creating Pressures and Pulls on

Software Professionals is 15%

B- Family Expectation creating Pressures and Pulls on Software

Professionals is 34%

C- Peer Expectation creating Pressures and Pulls on Software


D- Self Expectation creating Pressures and Pulls on Software


The above chart clearly depicts that family and Peer Expectations puts

the maximum pressure on the Software Professionals.


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2. The Proportion of Stress suffered by Software Professionals

Suffer from Stress

6%

28%

66%

Never

Rarely

Very Often


INTERPRETATION

The above chart indicates that most of the software professionals

suffer from work place Stress.


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3. Does working for long hours effect on your personal life

Effect on personal Life

67%

22%

11%

Yes

No

Can't Say


INTERPRETATION

The chart depicts that most of the software professionals feel the load

of their professional life on their personal life.


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4. Do you like to work in Teams?

Team Work

22%

61%

17%

Yes

NoCan't Say


INTERPRETATION

The chart indicates that software professionals prefer to work

individually than in team


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5. Traditional versus Managerial growth Path for Software

Professionals

A

67%

B

22%

C

11%


INTERPRETATION

A- 67% of Software professional prefer to work in technical field

B- 22% of Software professional prefer to work in Administrative

field

C- 11% of Software professionals are undecided.


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6. Is you company facing the problem of Attrition?

INTERPRETATION

The chart indicates that most of the software industries are facing theproblem of attrition.

67%

33%

yes

no


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7. Does Your Company suffer from Shortage of Man-Power?

67%

33%

Yes

No

INTERPRETATION

The chart it is observed that about 67% of companies suffer due to

shortage of Man-Power while 33% do not suffer from Man-Power

Shortage.


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8. Do you find it difficult to attract the best talent?

83%

17%

Yes

No

INTERPRETATION

The chart it is observed that about 83% of companies find it difficult toattract the best talent, while 17% of companies do not face this

difficulty.


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9. Has increased in demand if technology coupled with shortage of

professionals has increased the cost of delivering technology?

67%

33%

Yes

No

INTERPRETATION:

From the above Chart it is observed that 67% of the companies feel

that increased in demand of technology coupled with shortage of

professionals has increased the cost of delivering technology, while

33% of companies do not feel so.


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IMPLICATIONS OF DATA ANALYSIS

1. Managing Multiple Expectations

Each one of us can have and do have multiple expectations from the job

and career that we choose. However, in case of software professionals,

the expectations from the job seem to be too many and many times these

expectations are in conflict with each other. Chief Executive of a small

software company employing about 200 employees said that software

professionals when interviewed for job invariably say that they want to

learn and be technical leaders in their respective chosen fields. However,after joining the organization, they tend to use yard sticks to measure

their success that tends to be different from their stated objectives of

learning and be technical leaders in their chosen field. These yardsticks

tend to be tangible and invariably are derived from the expectations

experienced by software professionals from their family members and

their peers, in addition, organizations have their own expectations from

software professionals. These multiple expectations create pulls and

pressures on software professional.

As shown in Figure 1 and described earlier, software professionals hold

certain images about self as a professional. As a consequence, they

expect to nurture the image of themselves as


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Figure 1: Multiple Expectations Creating Pressures and Pulls on Software

Professionals

professionals by learning on a continuous basis and becoming technical

leaders in their chosen field, Organizations create very different kind of

pulls based on the requirement of markets and customers, They want to

deliver what customers require in the defined time and budget. The

customers from developed countries sub-contract many of the activities

Peer Expectations

Work withtechnologies and

software using

latest software

No. of visits

abroad

Family Expectations:

Big Money Big title

Self Expectations

Continuous learning Being a technical

leader in the chosen

field.

Equity in reward

Organizational Expectations

Work on assignments and

technologies required by

customers

Software

Professional


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to Indian software organizations because software professionals in those

countries want to work only on projects involving latest technologies

and software, This means that in many projects, Indian software

professional have to work on technologies and languages of yesteryear .

Due to Internet and e-mail facilities, Indian software professionals are in

touch with their peers in India and abroad on a continuous basis. They

are aware of the kind of projects and technologies their peers in India as

well as abroad are working with. This awareness creates pressures on

software professionals to aspire to work on similar platforms and

technologies, In the informal settings, peers tend to ask each other about

pay, perks and about their foreign visits. All this awareness creates

expectations and pressures to expect all these in one' s own organisation,

Software professionals further increase pressure on themselves and their

organisation by selectively picking up what are best pay, perks and other

facilities in different software organisations. Interestingly, the

benchmarking organisations do not remain same for long and software

professionals keep suggesting new organisations for benchmarking to

their top management and HR professionals.

In addition, due to hype about software industry, parents in Indian

society make lot of investment and sacrifices to ensure that their wards

are able to study software courses, Media keeps publishing about the

growth of software industry and how people working in software

industry have become millionaires, These leads to building expectationsof parents that their wards, should earn lot of money and support the

family. In India, being software professional and having visited abroad

gets perceived as status symbol in one' s family as well as in one' s

reference group. In many castes in India, number of visits to foreign


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countries made by a boy substantially defines the amount of dowry he

can command in his marriage. These pulls and pressures being

experienced by software professionals are real and are experienced on a

continuous basis. These multiple expectations lead to software

professionals being confused, tense and not being comfortable with

oneself.

A senior executive mentioned that intellectual capabilities of software

professionals are not necessarily superior as compared to professionals

working in other fields, However, due to media hype and the imbalance

between the demand and supply of software professionals, they tend to

build an aura around themselves, They tend to believe that they are cut

above the others and hence they must be treated differently and all their

expectations should be simultaneously satisfied.

2. Workplace Stress

Stress is a normal component of the bodys response to demands that

are placed on it. Work place stress can have a harmful effect on our

overall health.

Stress has become an inventible part of everyday life specially for the

people working in the I.T. sector, it is so because I.T. jobs are very

demanding in nature, the result is that due stress people are not able to

perform there job efficiently which reduces the productivity.

Reasons that cause stress:

Work overload


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Unreasonable job demand

Unrealistic expectation (Personal/Management/Peer/Family)

Role ambiguity

Job security

Performance monitoring

Low moral among workers

To save its employee from the stress has become one of the biggest

challenge for the I.T. companies.

3. Work life Balance

Software professionals enjoy being with their computers and in turn

computers tend to be highly addictive. Particularly; software

professionals when they are working on a project, they tend to and they

are expected to work long hours. Working for 12 to 14 hours per day for

long period of time seems to be quiet common. Long working hours is

valued by organisations, but more importantly software professionals

tend to believe that they matter for the organisation when they worklong hours. However, over time, the process of working long hours

disturbs the balance between work and non-work life and software

professionals tend to experience burnout.


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A person is expected to perform many roles related to work and non-

work life however, since software professionals tend to spend so much

of time on work related activities that all the other roles tend to become

irrelevant for them. In an extreme situation, for software professionals

only role-identity remains and personal-identity tends to get merged

with the role-identity. Professionals operating at self actualization

level tend to define their self-concept in terms of their work and hence

they may not feel bad when work becomes all encompassing. However,

in case of many software professionals work continues to be

instrumental in getting tangible rewards from the organisations. Hence,

consciously and a number of time sub-consciously, software

professionals exchange their free time and non-work life roles for

Organisational performance and tangible rewards associated with them.

However, the vacuum due to lack of non-work life activities leads to

emptiness with in and annoyance with the organisation.

4. Team Work

Software professionals seem to be reluctant to work in teams and they

prefer to be with their computers preferably working from their home

itself. Programming and coding work requires thinking and working by

oneself. Since software professionals in their initial phase of career

substantially work on programming and coding, it becomes their

preference and nature to work by oneself. Working in teams requires

that the team members should be prepared to learn from each other.

Software professionals seem to enjoy learning by themselves. They

possibly enjoy the joy of exploration and the excitement of finding out

something by oneself. Another possible' reason for lack of team learning


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and sharing may be that software professionals seem to be reluctant to

accept their ignorance in front of their colleague and superior, and

sometime in front of one' s subordinates. However, from organizations

point of view, reluctance to learn from one' s team members and the

desire to learn only by oneself is an expensive way of learning.

Many members of a project team are of similar' age and

experience. Since they are at same level, they struggle to define their

status and position in the group vis--vis their team members. One way

to have a higher position in one' s group is to get positioned as a more

knowledgeable professional. This in turn leads to a game with in a team

where by every body tries to prove oneself superior to others and a

politics of knowledge becomes part of work setting. These processes

adversely affect the team work and team processes in the organisation.

Software professionals also seem to be reluctant to teach and train

their team members. Software professionals are - often part of

temporary project teams. Since the relationship is temporary, leaders are

reluctant to make an investment of their time teaching their team

members new technologies, The attempt is to have team members with

requisite skills rather than investing time in educating them. In extreme

situations where the success of a project depends upon a number of team

members being able to work with new technologies, a project leader

shows willingness to invest some of one' s time to educate one's team

members.

The technology in software industry is evolving very fast, Hence,

every body including senior executives feels very insecure, One way to

manage ones insecurity is to have some exclusive knowledge and try to

be unique in the group. Secondly, senior people may like to use their

time to acquire further new knowledge rather than teach their team

members. Organisations are also not very sensitive to the efforts put by


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a manager to educate one' s team members, The focus is on what is

tangible and what is visible, Since mentoring contributions are difficult

to quantify and often their impact may not be noticed immediately,

managers and leaders are reluctant to make investment of time and

effort to educate their team members.

Selecting members for a new team is also a very difficult task.

Software professionals are either interested to work on projects

involving technology of their choice or location of their choice, If it is

posting abroad, software professionals are much more willing as

compared to a temporary posting in India, Software professionals who

are not picked up for projects of their choice or foreign assignments tend

to crib and complain of lack of fairness in the selection process,

Lack of teamwork in software organisations possibly has its

roots in processes of selection, training and rewarding; Software

organisation tends to give much greater importance to software

knowledge and skills than interpersonal skills at the time of recruitment.

Software knowledge can be more easily assessed as compared to

interpersonal and team working skills, Senior managers, part of the

selection team, themselves being software professionals, tend to value

software knowledge and skills more than team working skills at the time

of selection, This becomes another reason for due importance not being

given to team working skills at the time of recruitment.

In response to the above issue, HR managers had said that

partly these observations are true, But they said that today demand for

superior software professionais is much greater than the supply. In

addition, these days a number of multinational software companies are

recruiting software professionals/management graduates from Indian

Institutes of Technologies and Management (IITs/IIMs). Due to heavy

competition, organisations aspiring to recruit graduates from national


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institutes of repute have to use selection processes that are not very

elaborate and time consuming. Many organisations have deleted group

discussions and other processes, which use to provide some useful data

about team behavior of interviewees.

It has also emerged that neither the software professionals nor the

organisations tend to give the same level of importance to training for

teamwork as they tend to value training for software skills. By nature it

seems software professionals are not very keen to acquire soft skills of

team working. It was also seen in some organisations that while

software training was arranged from Monday to Friday, soft skills

training programmes were usually arranged on Saturdays, This creates

an impression amongst young software professionals that soft skills are

given iess importance by the organisation as compared to software

skills, However, it was reported that when training programmes for soft

skills are arranged on weekdays, even then the response in terms of

registration forthe programmes remains lukewarm,The lack of teamwork can ' also be ' contributed to' lack of

substantial team-rewards. While team members are encouraged to go for

picnic and have other fun activities together, organizational rewards

continue to be substantially individual based. This is possibly another

reason for lack of motivation for teamwork.


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5. Technical versus Managerial Growth Path for Software

Professionals

Traditional growth path for software professionals in Indian

organisations involves moving from being software professional to amodule leader to a project leader. Further a project leader is promoted as

a project manager and finally a business manager. The initial change to

a module/project leader may be only functional. It means that in a given

project, software professional may act as a module leader. But in

another project s/he may become a project leader or may remain only a

team member.

Why do Indian software organisations need so many positions of project

leaders and project managers? Presently in a large number of Indian

organisations, most projects are outsourced work from foreign clients.

Some of the key responsibilities of project leaders' in software

organisations are:

Interfacing with potential customers, understanding their

requirements, getting their orders and then ensuring that orders

are delivered in time.

Assigning roles and responsibilities and coordinate activities

amongst different team members with in the organisation.

Informing a customer about the progress of the project on a daily

basis.

Submitting a weekly project status report to the customer.

These activities may take anywhere between 25 to 40 percent of the time

of software professionals on a daily basis. Since these activities are

perceived merely as administrative chore, cutting down the

opportunities to work on programming activities. Software professionals


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do not like the role of a project leader.

However, from organizational perspective, it is a very important role.

Project leader is a very important link between customers' and

organisation, the project leader facilitates customers to feel confident

that the work is progressing as planned on their assignments A revenue

perspective also exists to the position of project leaders, The project

leader is usually billed at substantially higher rate as compared to

software professionals. Hence, organisations feel the need for promoting

software professionals as project leaders very soon in their career.

Number of senior managers had said that software professionals were

not interested in performing the role of a project manager. Software

professional prefers to learn and grow through a technical career. They

only want to work on technical work such as flow diagramming,

programming and coding. These tasks provide software professionals

opportunities to learn and use new tools and techniques. The technical

learning is specific, tangible and becomes part of the curriculum vitae of

software professional. Most importantly, many of the Indian software

professionals aspire to work in U.S.A. What get valued for such foreign

assignments are their technical knowledge and not their managerial

knowledge and expertise. Hence, from the perspective of software

professionals, they would like to spend most of their time doing

programming and related activities


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6. Attrition

The biggest problem that the HR managers in the software

Industry are facing now days is to control the attrition rate in

there companies. The standard rate is 26 percent in the IT

industry but it is going as high as 60-70 percent in many

companies. Small companies experience more attrition in

comparison to medium or large organizations.

The following are the reasons for the high attrition rate:

Company environment

Number of job opportunities

Work overload

Unreasonable job demand

Unrealistic expectation (Personal/Management/Peer/Family)

Low moral among workers

Lack of growth opportunities


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7. Short supply of professionals

IT industry suffers with the shortage of professional which is affecting

the growth of the IT industry .due to this the the companies are setting

there plants in new places. This tends to continue in future also and in

the year 2010 almost 3,70,000 IT professionals will be

require(NASSCOM)

SOURCE: NASSCOM


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8. Attracting the Best Talent

In a tight job market, many organizations often experience

precipitous and simultaneous demands for the same kinds of

professionals. In their quest for manpower, they are cajoling talent

around the world. In such a seller' s market, software companies are

striving to understand which organizational, job, and reward factors

contribute to attracting the best talentone having the right blend of

technical and person-bound skills. This would mean a knowledge of

' the tools of the trade' combined with conceptualization and

communication skills, capacity for analytical and logical thinking,

leadership and team building, creativity and innovation. The

Bangalore software industry suffers from a shortage of experienced

people such as systems analysts and project managers, and attracting

them is a key HR challenge

9. Compensation

Increasing demands of technology coupled with a short

supply of professionals (with the requisite expertise) has increased the

costs of delivering the technology. On an average there is 25-40

percent increase in the compensation of the IT professional due to this

software industry is losing its cost advantage.


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Chapter 6

Major Findings of Research

During the research investigation it was found that there are a number

of HR issues and Challenges which Software Industry in Bangalore is

facing. The future of the software industry will depend upon how they

tackle these problems.

FINDINGS

Attrition rate is very high. It was observed that the attrition rate is

higher in small organizations than in large ones.

As software profession is very demanding due to which most of

the software professionals suffer from the workplace stress

Software professionals prefer to work alone than in teams. This is

incredible.

Software professionals prefer technical work to administrative

work

Sometimes there demands are unrealistic

Software professionals prefer to work at a place which can provide

them maximum exposure and challenge their knowledge.

The professional life of the software people affects their personal

life.

Software people encounters multiple expectations i.e. from family,

peers etc. which affects there personal life

The Software Industry is facing shortage of software professionals


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Chapter 7

RECOMMENDATION

1. Creating a learning organization:

The software companies should become learning

organizations to ensures top-of-the line growth

2. Flexible working:

A flexi time schedule allow people to vary their start and finish time

around pre-determined core-hours

Flexible working will help organizations to retain skilled staff and

reduce recruitment cost; raise staff morale and decrease absenteeism

and react to changing market condition effectively

3. Job sharing:

A job sharing is an agreement usually involves dividing the workload

of a full time position between two people. It is great way for IT

people to keep on the fast career tracks while allowing them to spend

more time with there family.

4. Telecommuting/House working

It enables an individual to work from a location other than office or

project site.


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5. Anti-poaching agreements:

Under this agreement companies come under the mutual contact

which states that they would not entertain employees of each other.

This will discourage employees to change jobs frequently.

6. Compensation Philosophy:

Since compensation is an important retention criterion, it is good to

start by defining and understanding the compensation philosophy to

pursue. Most development organizations feel that they need to pay

in the top 25% of what similar companies pay to attract and retain

the top talent. Reward management continues to be a talent

magnet

(A)Creative Benefits:

Creative benefits include anything that does not fall into the

traditional benefits category. This is an area where companies may

provide significant retention incentives, often at a lower cost than

more traditional benefits. Six-digit salaries and lucrative stock

options are not the only things software development team

members want .Example Onsite or nearby subsidized health clubs

is a common benefit at many Silicon Valley software development

companies. Besides simply a retention aid, the side effects of better

employee health, lower stress, and reduced medical costs commonlyassociated with individuals who exercise regularly greatly benefit

the company.


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(b)Short-Term Incentives:

Short-term incentives are typically bonuses tied to meeting project

or group-specific milestones. Such incentives help motivate

employees to do "the best thing" for the current projects.

(c)Long-Term Incentives:

The most common long-term incentive in most software

development organizations is stock options that vest over multiple

years. This sort of incentives make employees feel a part of the

company and make them stay with the company for the longer

period.

(d) Market driven approach to retaining talent is quiet useful. This

approach focuses on Recruiting for Retention

7. Training and Development

Competitive compensation is certainly one part of the retention

picture, but it' s only a starting point. Software developers are

valuable for their technical knowledge, which quickly goes out of

date. Developers thus tend to value positions that provide ample

opportunities for training. So organizations should make proper

arrangements to update them on new techniques. Re-skilling is the

hallmark of an effective training and development.


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8.Job Rotation and Job Sculpting

The most successful type of job rotation is approximately eight

weeks in length, with software engineers typically rotating out to a

non-development organization, such as sales, marketing, IT

operations, or finance that will provide software professional a

change from daily work. Rotation to another development

organization is possible, but typically this is useful only if there is a

prototyping or other short-term development opportunity available.

Software professionals do require appropriate nutrients in there

jobs. The following charts highlights this :

Recognizes what

is important to

business

Communicates

recognition

criteria

TimelyMatches

recognition to

achievement

Creative

customized varied

Reason for

reco nition

Re-launch

periodically

Publicized and

visible

Recognizes

reco nizer

Personalized

Relevant to the

organization

Involves

teams

It is culture

Is frequent


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9. Mentoring

Mentoring programs are a useful retention aid for many

reasons. One of the best retention tools is good hiring. Somesoftware development organizations now assign a mentor to all job

applicants who are being seriously considered for a position. Job

applicants are matched with an employee who performs similar job

skills, if possible within the same development organization. This

gives the applicant a chance to talk to a peer and get honest feedback

on what it is really like to work for the company. Most applicants

are more likely to trust the opinion of an individual contributor on

this type of topic than a manager.

10. Companies can support and provide venture support to its

employees to become entrepreneurs/intrapreneurs.

11. Organization can facilitate software professional to generate

wealth for them ex. Employee Stock Option Plan.

12. Companies should create a workplace full of fun, excitement and

passion. Otherwise software professional tends to get bored very soon.

Various fun activities for software professional and there family

members should be organized from time to time. I.e. fancy dress,

music show

13.Employees Assistance Program:

To help software professional cope with a wide variety of problem,

the companies should monitor the employees assistance program

which provides diagnosis, counseling and referral for advice in respect

of problem related to work or family.


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15. To tackle stress at workplace, the following are the I,pereratives:

Arranging, yoga. Meditation sessions for software professionals

reduces stress

Varied tasks to employees for rectifying monotonous jobs

Outing /get together should be arranged once in 2 months, so that

software professionals can relax and enjoy.

Intensification of Employee Wellness Program

16. Software industry should use more of outbound learning to help

Software professional to learn the skill of team work.

17.Increasing the number of performance linked awards/rewards isquite helpful

18. Employees should be empowered substantially through

Employee Engagement Programs

19. We also recommend the prescription of Bob Nelson (Guru of

Reward Management) for encouraging the software professionals

Our research investigation calls for nothing less and nothing more

than a comprehensive, adaptive HR policy to tackle the problem of

software professional in the IT sector


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Chapter 8

Directions for further Research

Following are the fertile areas for further research:

1. Business Continuity planning in Software Industry An

analytical study

2. Behavioral traits of Software Professional

3. Multi -utility Job Description in Software Industry -A

Diagnostic study

4. Acclimatization of overseas Software Professional

5. Employee Engagement Programs in Software Industry

6. Career Anchor for Software Professionals

In our view, the afore-said areas constitute green pasture for

contemplating on going research in this important field


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ANNEXURE

SELECT BIBLIOGRAPHY

BOOKS:

1. Training and Development Concept and Cases

Edited By: V.V. Raman

(ICFAI publications)

2. Effective Talent Management

Edited By: V.V. Raman

(ICFAI publications)

3. Human Resour ce Management

By: John.M.Ivancevich

Tata McGraw-Hill Publications

4. Dealing with People

By: Robert Heller

D.K. publishing Inc. New York

5. Applied Human Relations

By: Douglas A. Benton

Sixth Edition (N.J. publication)


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6. (A) Six Sigma for Managers By: Greg Brue

(B) Managing teams By: Lawarence holpp

(C) Empowering Employees By; Kenneth

Documents

Amit Sharvmmmmma-0336-Human Resource Issues and Challenges in Software Indust