A fundamental change in the functioning of human resources (HR) seems to be on cards at Infosys. The Rs 5,472 crore company is working on establishing a direct link between HR and company?s overall performance. ?We look at all the roles in the organisation and map them to a hierarchy. Then, do the job description and have associated skill attached to it and build career goals,? says Infosys member of the board and director?human resources, education and research and administration, Mohandas Pai. The company added 3,538 employees during the first quarter of this financial year, taking the total number of employees to 1,03,905 as on June 30, 2009. A veteran at Infosy, Pai has been a member of the Board since May 2000. He was the chief financial officer from 1994 to 2006 before taking the responsibility of leading efforts in the areas of human resources and education and research. In a recent interaction with Rachana Khanzode, Pai talks about how the IT industry is balancing the demand and supply equation. Excerpts:

Has the economic downturn brought a fundamental shift in the workforce of the IT industry?

First, India has got enough talent so there is no shortage. Second, wage inflation has moderated as supply has come up and economy is not growing at the same pace. Third, companies are not hiring in advance but only when it is required. And largely, wage policy of the companies will depend on their performance. Initially, there was a demand and supply imbalance but now the equation has changed. So in the IT industry, there will be some equilibrium.

In the last 15 years, out of the two million people there are around 5,00,000 to 7,00,000 people that have 7-10 years of experience and who are the real project managers. This was a constraint that the industry faced and it has now subdued a lot. The constraint was not that of a software developer, but of a project manager.

It was also seen that a large number of experienced qualified managers used to migrate. For the last two years, there has been an inflow of these people. Like some report says that there are about 1,50,000 US citizens living in India of which about 60,000 have work permits. Last year, 19,000 work permits were issued to US citizens (some of them could be of Indian origin) to work in India. So at a micro level, the equation has changed.

Has the role of HR also changed with the changing economic realities?

Strategically, the role of HR will shift from recruiting to career development. And employees will be valued on the basis of capabilities and skill sets and not on the basis of demand. HR should be focused on career development and enrichment and their performance needs to be linked with that of the company.

IT industry will completely adapt to this in the next five years. HR will move to more strategic roles. The point is we don?t have good expertise and capabilities in the HR eco-system for large-scale career development. In the last 15 years not many have been doing it. Everyone was defined on fundamental gains like how many people to hire and what hike to give.

Has Infosys taken such steps?

Yes, about 14 months back we brought forth a programme that primarily revolves around restructuring of roles in the organisation and thereby developing career architecture. What it means is that we look at all the roles in the organisation and map them to a hierarchy. Then, do the job description and have associated skills attached to it and build career goals. We have 25 streams as career roles and value assessment has been built.

The entire 1,05,000 staff has been mapped under this programme. What we will be now doing is career path that talks about how people can progress and move ahead. To a large extent, during the high growth times, most people just moved upwards and it was perceived as growth. So we want to change that and say that growth will come with respect to what you deliver. So now you don?t get promoted if you don?t add that kind of value. But you can grow in the same role with respect to levels of competency. So every year, the level of competency goes up. Largely we are re-architecting on the HR eco-system.

From a HR perspective, what is the role of the government in enhancing the eco-system?

What the industry needs at the moment is social security. Large companies like Infosys do it voluntarily in terms of giving mandatory health insurance to its employees. But what is also needed is mandatory job insurance. And government needs to play a larger role in it. I have suggested it to the labour ministry also. Here, public sector insurance companies like Life Insurance Corporation (LIC) of India can play a major role. If the government makes it mandatory, LIC can give job insurance and working individuals can pay the premium. So when there is a downturn and an individual loses his job he can be assured for at least six months. But this needs to be de-linked from individuals who lose their job due to non-performance. LIC can link the individual?s data from his PAN number, current provident fund account and taxes. Government also needs to bring some benefits to the student community especially at the graduation and post graduation levels. The student?s loan in India is about Rs 25,000-28,000 crore and has a very high interest rate of 10-12%. Under an educational development fund, the same money could be lent at a subsidised rate of 6-7%. There needs to be an investment in the capital and in human resources for the future leaders.