T. V. Mohandas Pai has been instrumental in the success
of Infosys since the last 12 years. As a Member of the Board and the chief
financial officer, he is responsible for the financial integrity of the business
— from sourcing capital to investment in various businesses, evaluating
performance, and ensuring returns.
Pai was one of the key players behind listing Infosys in the NASDAQ, and
thereafter, in conducting sponsored secondary offerings, both of which were
firsts in India. He played a vital role in instituting an employee stock option
scheme, another first in the country. Pai will step down as the chief financial
officer of Infosys by the end of this month and will instead head human
resources, education and resources, and administration. “We practice what we
preach. We have to make way for the younger people to get strategic
opportunities,” he says.
Talking to Srinivas R of CyberMedia News, Pai discussed the current
challenges in HR, issues with education system and industry's role in
improving the talent pool. Excerpts:
As finance head, you ushered in new processes and innovation in Infosys. In
your new role as HR head, what all are you planning to introduce while hiring,
retaining talent and for the career path of employees? Also, what are the main
challenges you see in your new role?
Innovation is the key. Whether it is in Finance or HR. In HR, we were amongst
the first in the industry to introduce ESOP. Similarly, we have a role-based
organizational structure, high performance work ethics, and variable pay, an
open, transparent, collegial culture. Innovation doesn't stop here. We will be
introducing new things as and when needed.
I think we have three key challenges in HR. First, to enhance the bonding
between the corporation and employees. Here we have to work on a few measures
like enhancing the transparent culture; greater feedback to employees on issues;
and developing leadership. This has to be from the junior level and across the
corporation. We also need to provide domain enrichment to each employee through
continuous training.
Second peculiar challenge in India is that our ecosystem doesn't support the
growth we are experiencing. It is not matured enough to create a large body of
people with high quality domain skills and leadership capability. As a result
there is a shortage of people who have managed large industries, or have the
domain expertise of complex systems.
Third challenge is on policy. We need to create policies for seamless growth. We
have to look at our education system as we grow. We need to create a vibrant
educational system, which can enhance the quality of education for our students
and create the scale needed for India. Currently, our economy is at $800
billion, and it will double to $1.6 trillion in the next 10 years. In 10 years
we have to double the existing number of professionals that we have in India. We
need to add enough professionals as we have added over 55 years in the next 10
years.
If we look at only the IT industry, it needs 300,000 people in India this year.
This will be a serious challenge for India Inc. this decade. The current
educational system is unable to deliver what industry needs. There is inadequate
faculty, too much governmental control, inadequate capacity. This has to be
addressed at the state and national levels.
You are looking at hiring 25,000 people this year. How do you plan to get
these many talents when other IT companies are also targeting the same pool?
We have already made 6800 offers in various colleges. In the first quarter we
are looking at hiring 8000 people. This way the pressure will come down.
However, the main challenge -- as you said -- is that everybody is looking at
the same pool. The only answer to this is that we need to expand the pool. To
expand the pool, we need to re-look at our education system. We have to double
the capacity in our educational system over the next five years. The private
sector has to make large investments. Otherwise it will have to suffer the
consequences. IT industry alone will need to make an investment of $2.6 billion
on training over the next three years. This is an enormous challenge, which we
as a country are inadequately prepared to address. I am worried at the
complacency all around that India will grow at 7.5-8% for the next decade and
everything is going great. Everything is not going great. The human resource
side is the biggest challenge, which can derail growth unless we address it.
Could you elaborate on your statement, the need to re-look at our education
system?
Government has to invest in educational programs. It has to undertake massive
faculty development program. Government has to change the policy framework. We
need much more liberalized higher education policies. Create incentives for
teachers and professors. We need to create scholarships and subsidized fees for
bright and young students. We need more involvement of the private sector
If we look at our IITs and IIMs, every year over three lakh students appear for
the IIT entrance exams. I am sure that more than two lakh students in this pool
would have spent more money on tuitions than the total money that would have
cost them to study the entire course. At the end, only 5000 out of three lakh
will make to IITs. In that case, 295,000 will start their career with
disappointment because of a failed education opportunity and with a huge waste
of resources. For a billion people, we cannot have only 5000 seats. It is a
failure of the government and society that we deprive our bright youngsters of a
good education and force them to go abroad or suffer with frustration at the
start of their careers. We underpay our faculty, we subsidise education for the
few and the great majority suffer. It is a ridiculous state of affairs. The same
situation exists for the IIM's.
150,000 Indian students study abroad and spend about $3 billion as fees every
year. This is more than the higher education budget of the Union Government.
This money could have been spent within India and could have been used to create
a vibrant education system if only we had better policies. To me, it seems that
we are deliberately shackling our future generations because of our fascination
for a failed ideology. This is creating frustration in our future generations
and making them disillusioned. We need radical change in the way we look at
higher education. Government has to look at this and change the policies and
open up the education sector.
Is Infosys initiating any moves in this direction?
We are planning to take up this issue with the government. N R Narayana Murthy
is speaking to the prime minister on this. Nandan (Nilekani) is talking to the
planning commission. We are all talking to other stakeholders. NASSCOM has a
bigger role to play in this. We have also started the Campus Connect and Genesis
programs in engineering and degree colleges to enhance quality, share our IP,
and create more job opportunities.
Hiring freshers means it would take sometime for them to learn. Don't you
think it would affect employee productivity?
Yes, it will take some time for them to learn. However, we have the processes
and systems in place for training, technology framework and continuous
education. When you hire the best and the brightest, the learning curve is
steep. But if the IT industry hires the top layer what happens to the rest of
the Indian industry? Wages go up, other industries suffer.
Instances of aspirants floating fake resumes are on the rise. How does
Infosys tackle this issue?
We check about our employees before taking them. Even we have a third party
organization that does the background checking. We cannot get to know one's
criminal record if they have. So we insist our employees to have a passport,
where police verification will reveal any criminal background.
Don't you think NASSCOM has a role in checking this menace?
NASSCOM has a major role in this. In fact, NASSCOM is building a centralized
database of such fake resumes
You introduced ESOP a few years back. Is there
anything that you plan to introduce now?
We have suspended this scheme now. For senior staff we are looking at various
other options such as deferred compensation. It is like creating a compensation
pool. We are working on this and it will take some time for us to provide the
full details on the same.
Bangalore recently witnessed an unprecedented violence and arson. There is a
view that it was triggered by the divide between the `haves' and `have nots'.
How do you see this?
Today IT companies in Bangalore have become the visible symbols of progress. I
can say that 60 per cent of the population in the city has done well
economically due to the growth led by the IT industry, the manufacturing
industry and the garment industry, and the ecosystem this has created. The
balance 40 per cent needs help. Because of our discriminatory educational system
a large number of our young people are deprived of good job opportunities. The
governmental educational system is in disarray, English language is not taught
in a majority of government educational institutions, and these young folks are
at a disadvantage. They also do not have marketable skills.
This is creating an unequal system with the odds
stacked against a large number. Providing good education is the only solution
for this. Today the quality of education differs in semi-urban and rural areas
compared to urban area. Government has to look at providing quality education to
these deprived people. Urban governance is broken. Riots partly symbolize the
frustration of the left-outs. Governments can solve such problems. If we look
around, making Delhi a separate state helped a lot; Nagpur and Surat are better
cities today. There are many examples, which we can emulate.
Does Infosys plan to start a trust that can fund education or healthcare?
We have separate programs for providing food for school children and other
activities through Infosys Foundation. Corporates cannot spend shareholders
money.
Should the industry play a role in making Bangalore better? If yes, in what way?
Would it be in the lines of the Tata's developing the Steel City of Jamshedpur?
Today Bangalore is globally known for its IT industry. Lot of foreign
investments is coming to the state. The city has developed but needs more.
Industry can play a role in providing the intellectual and managerial input to
make the city better. It is not a mere case of resources but of governance,
policies, transparency and quality. Governance in Bangalore needs to improve.
There is bad quality infrastructure because of the bad governance and the way
contracts are handled. This can be tackled by better management, as has been
done in other cities. Industry is helping out but industry cannot fund
infrastructure. There is adequate money on account of the taxes the consumers
pay for this.
When Tata Steel was built there was no infrastructure there and so it had to be
done. The benefits to employees included the cost of this infrastructure. In
cities our compensation policies allow our people to buy houses, cars, consumer
goods of their choice. So the model has changed and in cities others provide the
infrastructure but our employees can afford to pay for that. Either way all of
us are bearing the cost of this infrastructure.