Friday, March 20, 2009
The Indian IT (and ITES, BPO) industry is a newish industry. It is an industry where the average age is a little under 30 (lower for BPOs). And it is also one of the industries plagued by attrition over the last few years. And in this industry, by and large there are two categories of people.
One category is the long term category - where people remained loyal to companies, sweared by retention bonuses, held onto ESOP plans. They believed much of their company sold them as far as employee value, talent retention and the like. Their increments in general were lower than what they would get if they jumped ship every now and then, but they were satisfied. They also believed that they were in it for a long haul.
By now you of course know that the other category is the short term category. They changed their jobs ever 2 or 3 years, got their 25% increment and promotion too, in most cases. They also listened to everything that the company had to say and then decided if it is worth staying or moving on. They were satisfied too with the progress they made in life and location. Overall, they believed in the long term, but had an eye on the short term as well.
The former category despises the latter category. It was the stayers at the wicket who by virtue of staying on at the pitch, scored runs, inpartnership with these short termers. To use an old Test cricket adage, 'Stay at the wicket and you will score runs'. There were swashbuckling batsmen who came in and played a whirlwind inning and went off, but nobody could afford a team that consisted of only swashbucklers or only doughty Gilraltars.
Note that this is not just an IT industry thing. It is also a stockmarket thing. With a slightly different context, there are all types of investors - ones who provide the solidity and ones who provide the churn.
With one difference. Unlike the share market which does not advertise requirements for different types of investors, companies (and not just in IT) always sold themselves as "employers for life" - give or take a few. Whether it was under the guise of a retention plan, ESOP, promotions or the promise of a long career. They encouraged employees to stay on as long as possible, even going to great lengths to ensure their employees were well taken care of. Companies never marketed themselves to the short term employee - they hoped that the next person they hired would stay on, but they planned for his or her eventual moving on. So, the long term value proposition was "sold".
For better or for worse, about 6-8 months back, not too many people saw the collapse. Every person who has been part of any boom knows there will be a bust and a pretty sharp one at that, but this time the scale took them by surprise. It is like batsmen know they will run into and out of form, but nobody expects the form of a test player to dip to gully cricket level without knowing when it will be back.
So, as of today, the short termers are having the last laugh. With retention bonuses shrinking, ESOPs coming to the price of soft drinks - they are happy that they kept moving. So, given where we stand today, there is no saying what long term is. Nobody knows what the long term is.
Like (Keynes?) said, In the long run we are all dead. My question, Is the long term dead too, atleast for the short term?