Thursday, May 01, 2008

Accenture Hiring in India

My former employer, Accenture, has been doing very well in India, ramping up thousands and thousands of employees.

Business Week wrote about them here

Full quotation of the article below
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The Analysis: Learning from Accenture

The author of Talent on Demand talks about what the consulting company did right in ramping up in India, and what it could have done better

Accenture's story is important in a lot of ways. Having to go to a new country or a new market and ramp up very quickly is something that a lot of companies are facing today. Sometimes it happens because you go to a new market where you haven't been before. Having to go to a new country or a new market and make changes to your talent pool is something a lot of companies are facing today.

This is different from 20 years or so ago, when demand was quite predictable. Then, you could more or less forecast 10 years out and determine what you were going to need on the talent side. Now these things change very quickly, and companies have to ramp up very quickly and scale back very quickly. It places huge demands on forecasting.

I think Accenture did a good job of getting up to speed very quickly in India. They did a lot of things right: They reached out to the community in various ways in terms of branding. They created their own human resources academy—a way to get the infrastructure necessary to get a lot of people in quickly and move them up. And they centralized their operations to get some scale economies and avoid duplications. All that is good.

The Cost of Being Wrong
There are some other things companies can think about. The first is to think about the difficulty in making these forecasts. These are huge bets and the human capital issues are a big part of it. Rather than just guessing and saying, "I think our best estimate is going to be we need this many people," a good idea is to develop some scenarios; some alternative versions of what we think we're really going to need. Often, we're guessing. We don't know for sure what demand is going to be. How many people do we think we're going to need? What are the odds of getting this many people? What happens if this assumption is wrong or that assumption is wrong? You end up tracing out something like a probability distribution, and saying, "Here are the odds it will be this much or that much." As a result, you get a much better sense of what the real demands will be, and you're less likely to make big mistakes.

The other way is one that comes directly out of supply chains. This is what I've been working on with my book, Talent on Demand. This is thinking about things like the cost of being wrong. Think about what happens if we have too many workers. What happens if we don't have enough? There are costs on both sides, and you want to try to minimize both of those.

I think another thing Accenture did that's interesting and that all companies need to focus on is different ways of attracting employees. They focused more on hiring people, but there are other approaches to getting employees which are more inspired by "just-in-time" supply chain logistics. It's more expensive per unit, but it helps you reduce the uncertainty. Relying on temporary workers and contract workers can help you close the gap with a little less risk.

Managing Bottlenecks
Another part of this is not just bringing people on—it's also getting that many people up to speed once you bring them in and developing them inside the company. Centralizing here is a good approach. Often companies have different units that are each hiring, and each unit makes mistakes. Maybe this unit has too many people or this one has too few people. If you're centralizing all this, you can use a portfolio approach. Some have too many, some have not enough. It cancels out.

I think there's another supply chain issue as well—managing bottlenecks. How many people can we actually bring on at one time? One of the ways companies can get better at this is to try to smooth out the process of bringing people in rather than hiring everyone all at once, say, right at graduation time. To do that, you need a huge capacity of onboarding for helping people get up to speed with the company's culture and for training and developing them. If you could hire even twice a year, then you need only half the capacity, half the training positions, half the supervisory time. Thinking about talent management like a supply chain, and bringing in some of a supply chain's lessons, can apply to moving people in and out of an organization.

Peter Cappelli is the author of Talent on Demand: Managing Talent in an Age of Uncertainty, published by Harvard Business Press. He is the George W. Taylor Professor of Management at the Wharton School at the University of Pennsylvania and the director of Wharton's Center for Human Resources.

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What you guys think of the policy of Accenture hiring in India? Do you think they hire fast enough? or they hire too fast? What would be the impact if there is a slowdown there? What is the best way to mitigate?

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2 comments:

frank said...

Chen,

Nice blog. I think Accenture had to ramp up as fast as they did in India in order to remain competitive in the global outsourcing market. I find it interesting that they grew organically vs. just buying an established Indian company. With cheaper labor their margins were higher and prices were lower. That's the global BPO and call center "game".

The question I have is why didn't they retain your talent? What drove you to resign and move on?

Chen Chow said...

Despite my leaving of Accenture, I would still say that Accenture is a pretty good firm.

Accenture does try their best to retain me.

On why I move on to JobStreet.com, I would say that it is a different experience and it provides me to do stuff that is really on my passion!