Since cofounding Infosys Technologies in 1981 with six others and a mere $250 in capital, Kris Gopalakrishnan has helped build the Bangalore-based company into one of world’s biggest and fasting-growing providers of IT services and business consulting. Infosys employs more than 150,000 people, and annual revenue reached $7.08 billion in fiscal year 2012
To maintain its growth and cope with notoriously high turnover in India’s IT-services industry, Infosys has developed one of the world’s largest and most successful employee-recruiting and training programs. Roughly 70 percent of the 45,000 employees that Infosys added over the last year were hired out of college. Stephen David, a senior advisor in BCG’s Atlanta office, recently spoke with Gopalakrishnan about the company's approach to recruiting, developing, and keeping talent. The following are excerpts from their conversation.
I am here today with Kris Gopalakrishnan. Thank you very much for agreeing to come today.
Thank you for having me.
What challenges do you see moving forward for global companies like Infosys?
There are two things we worry about. One is being relevant to our clients. Are we making the right choices in terms of services, in terms of solutions to keep up with the changing world and be relevant to our clients? The second challenge is about the leadership required to take this company forward. Do we have the right set of leaders who can continue to manage this company as the company moves into a new future?
You have a really terrific history of being voted one of the best companies to work for, certainly in India. Talent is obviously important. That's a really wonderful accolade to get. Do you work at that?
Definitely, because ultimately it's all about people. And if you have the right people, the business will be able to face any challenge. It will be able to provide the right set of services, solutions, and products to your clients. We start with recruitment, employee training, and leadership development. These are the three areas we focus on. In a year, typically we get about a million people applying for jobs. In the last 12 months, we have made offers to about 45,000 people. So, you know there's a significant filtration that happens when people apply for jobs at Infosys. About 70 percent join us straight out of college. And for those people who do not have prior experience, we put them through a six-month training program. This is one of the most comprehensive and probably one of the longest training programs in the industry today, especially in the services industry. This is six months of in-campus, residential, classroom training. It's a significant investment we are making in our employees. On the leadership side, we have also created a leadership institute. We take a formal approach to leadership development.
We hear a lot about turnover in India. That has to be a tremendous problem for you.
Right now, turnover is around 13, 14 percent, out of which about 3 to 4 percent is involuntary attrition. These are people who have performance issues or value system issues, etcetera. So the real turnover that we worry about is the 10 or 11 percent that leave us and typically join the competition. Out of this, actually about a third go for higher studies. This is again a very unique phenomenon in the industry in India. A lot of people join straight out of college after getting an engineering degree. After three or four years they want to do an MBA—typically an MBA in the U.S. We don't really try to stop them because it's good for them. So the 6 to 7 percent is who we worry about, people who join our competition. You have to give them a basket of benefits. Because every individual is not the same. They look for different things. Some people look for compensation. Some people look for a good place to work, an open environment. So we've looked at all these issues and tried to put together an environment that is attractive. And the last thing—the most important thing—is whether they are learning.
There are two styles of hiring people. One is that you hire people and have an expectation that you'd really like to keep those people and have them retire at your company 35 or 40 years later. Another kind of philosophy says, “I'm going to hire good people, but I expect a lot of attrition and I'm going to bring people in at multiple other levels so that my company doesn't get stale." What's the philosophy of Infosys?
Our philosophy is to recruit about 70 percent of the people at entry level, straight out of college. Now as I said, within three to four years about a third of them will go for higher studies. We've seen that from the past. So there will be significant attrition in the three- to five-year period. After that, they continue to stay with the organization. That's the trend we have seen, and so we've built the organization that way. If I look at two levels below me and across the company, about 60 to 65 percent of the people have only spent about 15 years with the company. There are people who have spent beyond 15 years, which is only 30 percent. So there is a good mix of people who have joined the company and grown for the past 20 or 30 years and people who have come from outside and contributed significantly.
Many companies say they do mentoring, but they really don't do it when it comes down to it. It’s really kind of just ad hoc. A few people do it well. You seem very proud of the mentoring system at Infosys. Can you tell me about it?
Mentoring is part of our leadership-development process. It is also a requirement of each leader to act as a mentor. We say that a responsibility of a leader is to develop other leaders. And the way you develop is to identify and mentor the person to make sure that he or she reaches their full potential.
Tell me about your leadership institute. Is it a big organization? Does it report in to you? How is it structured into the company?
It's a small organization. Today we have about ten people in the leadership institute. There's a director, who is not on the board. The leadership has three responsibilities. They manage the leadership development process. Second, they manage the assessment. More and more, we are creating formal assessment processes for the leaders, using modern assessment tools and techniques. We have to evaluate people based on their value systems, on their behavioral traits, and things like that to predict how they will behave in the future in certain situations. Today, there are tools available for such assessments. The third is managing this mentoring process. Part of this mentoring is that we require the leaders to also teach classes.
To sum up in a few words, what are Infosys's core competencies? Why do people want to come to Infosys to partner with you?
We focus on our clients and we focus on innovation, marrying these two together. We believe that successful businesses are those that look at building a new future, building a better tomorrow. So we partner with our clients to build a better tomorrow. That's what we focus on. And that requires you to look at the client’s business and marry that with innovation, marry that with technology. That's what we do reasonably well.
Kris, I want to thank you so much for taking time today and to talk with us. I think your thoughts have been very inspirational, and Infosys is a really terrific company. Thank you very much.