New findings in HR practices of information technology industry

Updated: Jan 24 2002, 05:30am hrs
A comprehensive ‘IT Industry Human Resource Assessment,’ conducted by global management consulting and outsourcing firm, Hewitt Associates, found that that in a majority of the IT companies, new hires came as a result of internal referrals. Additionally, a formal development and learning needs analysis system was found to be in place among most high-tech firms. Furthermore, a large proportion of the IT Industry in India reportedly provides formal career path and development processes for their employees.

‘‘The review found that, overall, the management philosophy of high-tech organizations emphasize attracting, retaining and motivating the best available talent,’’ said Mr Nishchae Suri, Hewitts Business Head for the Measurement Practice (India and Middle East).‘‘As a result, the management teams are generally open, accessible, and support the career development of their employees. This was further supported by, and reflected in, particular practices and policies with regard to orientation, the work environment, rewards and recognition, and health and well-being.’’

According to the Hewitt research, trends in pay structures in the IT industry indicated that most companies provide employees with cash-heavy compensation packages. In fact, the assessment shows a ‘cash-to-benefits’ ratio of 80:20 on average, slightly higher than most other industries, which have ‘cash-to-benefits’ ratios averaging 70:30. ‘‘These cash-heavy compensation packages could be attributed to the young demographic profile of the IT industry,’’ said Suri. As a result of this type of pay package, benefits such as housing and vehicle loans are not very prevalent in this industry. A significant majority of the organizations studied offer their employees a flexible compensation package, despite the administrative work involved. Such a structure gives employees the option of maximizing their tax-advantage to suit the demands of their individual lifestyles. The study also showed that variable pay ranges from 5 percent to 10 percent of Total Cost to Company among technical professionals in the industry. Support functions - such as finance and administration - receive variable pay that constitutes 5 percent to 9 percent of their Total Cost to Company.