HCL Tech rejigs hiring strategy

HCL Technologies plans to fundamentally shift the way it hires. It is setting up two training campuses for freshers in Nagpur and Manesar expected to be ready within 3 years. This is in line with what is practiced by IT majors like TCS, Infosys Technologies and Wipro that spend huge amounts of resources on training freshers. HCL's hiring strategy has so far been based on project needs rather than building a large bench of recruits through campus hiring in anticipation of future projects. HCL also has a policy of hiring larger proportions of laterals with 3 to 8 years of experience. They prefer welltrained professionals who can get on with the job swiftly. As a result the percentage of lateral hires for HCL has been greater than competitors. An IT sector analyst says the company is looking to reduce the proportion of laterals from historical levels of 70% to around 20-40 % which is the norm for top tier IT companies. For most parts of the fiscal year 2011 the level of lateral hires at HCL stood at 80%. HCL officials say that they have already begun readying for the future with the proportion of laterals added in the September quarter standing at 55%. R Vaidyanathan, head - operations at HCL, said the company is setting up training facilities for logistical reasons. The company is growing in scale with a large employee base of over 80,000 employees. The campuses are expected to have a capacity of around 6,000-7 ,000. The company has a 4-12 week training cycle and relies upon rented premises to train new recruits. It did not elaborate on the investments. Over the last few years the company grew fast by aggressively bidding for contracts through a differentiated strategy of low pricing combined with a larger number of experienced hires. Now that many of these contracts have matured, it requires more fresh recruits to service them. So HCL has begun to follow a dual policy of continuing to recruit laterals aggressively to win new deals, and have a larger share of freshers for matured contracts. The strategy of recruiting a larger proportion of expensive laterals has affected the margins of the company which is lowest amongst peers. But the company now enjoys the highest revenue per employee, after having the lowest revenue per employee 5 years back. For example, in the September quarter , TCS's operating margin was 29.1%, Infosys's was 31%, Wipro was 19.1%, while HCL's was 17.1%. But in the same quarter TCS recorded revenues per employee of $11,734, Infosys did $12,311, Wipro $11,174, and HCL$12,444. The company hopes that a larger proportion of freshers will now help improve HCL's margins. However HR experts say that finding the right balance of freshers and lateral employees could be challenging .To maintain the same growth levels while transitioning to a new hiring regime requires a different mindset and HR strategizing, said Surabhi Mathur Gandhi, senior VP at Teamlease .