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Musings on the IT Sector
An Article
I came across an interesting article from a well known national daily entitled Jobs, pain and the world of IT.
http://www.thehindu.com/todays-paper/tp-business/jobs-pain-and-the-world-of-it/article5517002.ece
Its an article that’s critical of the IT industry practices and highlights a couple of problems. It expresses a certain point of view.
Response
I would like to voice my thoughts on reading this article. Disclosure – I used to work in large Indian IT sector firms till 1.5 years ago. So I do know some things that happen here.
- Every success will face some amount of skepticism and criticism. Certainly this article is one such.
- This industry also has people from the real world working in it, so there will be many real situations, some described in this article.
- In every industry anywhere, also in India, there will be some friction between Promoter/ management and employees. This is natural. The former may be paid 3-10 times more than the latter. Infosys at one point was very employee friendly and decided that this ratio will not go too high.
Computers Monitor (Photo credit: yum9me)
- Resources: The main resource for the IT industry is intellectual capital/ employees. Even now, revenues are generally proportional to the number of employees. An important activity for an IT company is hiring and this is based on internal demand projections. Certainly many firms have gone wrong here and found that campus hiring done in Oct of one year was excessive compared to business demand in the second year, 12-18 months later, as the environment has changed. This should be handled properly and painlessly by any firm, and I cannot comment on any specific event or firm.
- The Visa challenge: Getting Visas today is a very complex issue is for an IT company. It is critical to get a visa in order to get any work done abroad, yet every country has complex laws and rules, costs and rejection rates. Hundreds of employees in India in one project depend on 4-5 visas for onsite visits. And now countries are making it tougher to get this. I would not say that the IT sector is threatened. But there can be a 20-30% costs rise for Indian IT firms if certain countries carry out a visa revamp and clamp down.
- Work environment: If one company ‘tightly controlled’ lives of its US based employees, it needs to be handled by the employees there. All of us in large companies face some work environment challenges. The treatment of foreign postings as a limited period incentive by firms does not sound like a serious freedom violation to me.
- Rigidly exploitative. 14 hour work schedules. Tough words. But in return the employees get salaries that are 10 times the national per capita average of 55,000 Rs/ year. Plus good learning. Plus foreign visits. India is a free country. We are all searching for a dream employer who pays well for 8 hours of easy work, right?
Opinion
- My opinion is that the IT sector has over the last 20 years provided Indians lucrative employment, sometimes fabulous riches, and companies worldwide wonderful, quality services that they are willing to pay top dollar for.
- And the Indian government must learn how to understand, nurture and grow industries while at the same time setting standards for employee/ labor conditions.
Read some of my reports on the IT Sector:
- Just Dial Ltd – Snapshot of an Equity Research Report
- Future Gazing – Business and the Internet of Things
- Mindtree Ltd. – A Possible Star
- There’s nothing wrong with Apple Inc.
- Indian IT Sector Mid Caps – A Treasure Trove
- IT sector stocks – The Elephant can Dance V2
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Disclaimer:
These reports and documents have been prepared by JainMatrix Investments Ltd. They are not to be copied, reused or made available to others without prior permission of JainMatrix Investments. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com
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