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2.0           HR IT SCENARIO

2.0.1               The web is altering the HRD landscape beyond recognition. The key to corporate success in the fast changing information era is ‘thinking on your knees’.

2.0.2               What is this thinking on your knees? Normally as the HR person you know what the situation is and operate from there. A repositioning is required in your decision process with questions like why, how and when and not just what. At this point you operate on your knee i.e. with far more dynamism and with a lot more effectiveness than thinking on your feet.

2.0.3               The employees are like gypsies, on the move all the time. They camp at some location, enhance their skills, responsibility levels and move on. This is particularly true of the professional from Software Industry. Opportunities are plenty and the next job opening is only a mouse click away. The question is not about what else you can do to retain an employee but it is about making him productive, while he is with you. The value addition will then happen for both the employee as well as the employer resulting in a win-win situation. This means that the new strategy calls for the recognition that no employee is expected to be permanently with you. Normal tenure in any organisation  is likely to be between two to three years.

2.1               INNOVATION IS THE KEY

2.1.1           Information    technology  and  Internet  have  changed  several equations. Reaching out to the world market place is no more the challenge in achieving corporate victories. Out thinking the competition at electronic speed is the key to winning corporate battles. The corporate success is sum total of entrepreneurship practiced by your staff.

2.1.2               The  key  to  employee  longevity :-Today’s most successful organisations recognize that to fuel growth and sustain a competitive advantage, they must make recruiting, hiring and retaining top talent, as the organisation’s major thrust area. Competent people deliver the rest don’t matter. Successful business organisations have no choice but to promote the performers and let non-performers go.

2.1.2               Organisations recognize that that  their ability to gather, manage, analyse, distribute information and transform themselves into a learning organisation will provide continuity and ensure for them their leadership role. Systematic organizational learning should be central corporate philosophy. Learning, must be obviously followed by changes, which may not necessarily be welcomed by veterans in the organisation. But ‘change is the only Constant’ for guaranteed success.

2.1.3               Points to note: The following  points are important and must be properly understood.

·           People have a great deal of informational knowledge to contribute to the organisation.

·           People are responsible

·           People desire opportunities to effect change, not just being expected to change.

·           Organisations need to create awareness amongst their employees about their vision and then empower them to act on that vision.

·           Establishing a sense of urgency well ahead of the problem surfacing.

·           Form inter-functional core group. Encourage the group to work together as a team.

·           Plan and create short-term win targets – reward employees and recognise achievers.

·           Consolidate improvements through a knowledge base driven system and institutionalise proven new methodologies.

2.1.5        New Paradigms In HR

·           Business plans must consider HR issues, focus and adapt.

·           Corporate goals must factor in individual career growth and personal growth must be tied to corporate growth and vice versa

2.1.6                Job responsibilities must facilitate personal development and learning should be institutionalized with well-established knowledge bases. Capturing experience and making it available ‘corporate wide’ should be a permanent feature of an organizations.

2.2              WAR FOR TALENT

2.2.1               The world’s most popular people resource base seems to be falling short of numbers to meet its own demands. With added pressures of migration and attrition, can India’s IT industry achieve its software and services revenue target of $87 billion by 2008?

2.2.2               Country: India. Population: 1 billion-plus. If that sounds like too many people, think again. Plug in English-speaking and low labor costs, and suddenly we can envision $50-billion software exports target by the end of this decade. Not impossible, if we consider the scarcity of IT manpower across the world. Take a look at the US, already with a 10- million-strong IT workforce, which needs to fill 1.6 million new jobs in the next one  year.

2.2.3               Japan is no different and estimates close to a million new jobs. Germany is looking for 20,000 IT specialists and Italy is seeking 15,000 additional manpower. Their choice destination—India.

2.2.4               Ironically, the country which has been such a popular people resource for the IT industry the world over, is struggling with numbers to meet its own demand. To meet the overall software and services (domestic and export) target of $87 billion by 2008, according to the Nasscom-McKinsey report, the country will require a minimum of 2.2 million knowledge workers for its domestic needs. This implies that the present strength, which stands at 12,00,000 (December 2004), has to increase about twice, not just in quantity but in quality as well.

2.2.5               According to industry estimates, majority of the demand for manpower will be in the area of IT-enabled services. While Nasscom puts the requirement at 11,00,000, MIT says IT-enabled services and e-business will need 12,70,000 workers by 2007. Experts insist that since this sector does not require very highly skilled manpower, we can easily meet this demand. "IT-enabled services is a wonderful opportunity for India and for such services you don’t need highly skilled professionals. You just need smart graduates who can speak English, all you need to do is train them. For instance, in a call center, they need to be trained on accents and customer services,"

2.3                   4 R’s of HR in IT

Table 2.1



Signing bonus

Finders Fee

Alumni connections





Retention bonus

Project pay

Reduct FTE/same pay



Job sharing

Recognition programs


Job rotation

Team assignments

Skill inventories

Competency development



Broad job descriptions

Flexible compensation programs

Flexible jobs

Positive problem-solving spirit

2.3.1                OBSTACLES

·         Denial (This is  and long term)

·         Misalignment (Ramping up/Ramping down)

·         Timing

·         Treating everyone the same

·         Navigating the bureaucracy

·         Demographics

2.3.2              WHAT OTHERS ARE DOING

·         Pooling recruitment efforts

·         Increasing freedom at the dept level

          (on-the-spot hiring, broadbanding, etc.)

·         Recruiting/retaining students

·         Identifying tech skills in all jobs/people
(Skill Inventories/assessment)

·         Sharing staff

2.3.3            RETENTION FACTORS

1.             Quality of boss

2.             Direction of department

3.             Exposure to new technologies

4.             Confidence in the company

5.             Job security

6.             Challenging work

7.             Location

8.             Access to capital resources

9.             Caliber of co-workers

10.           Empowerment

11.           Department leadership

12.           Ability to influence department success

2.3.4      TAKING THE LEAD

·             See ourselves as problem-solvers

·             Develop critical skills and competencies in ourselves, then others

·             Build compensation around results not tasks; competencies, not seniority

·             Involve everyone. Constantly align and balance resources to meet changing needs


  • Attract, retain and reward the best performers (Encourage all to be the best)
  • Increase flexibility
  • Reduce fixed costs
  • Reduce administrative effort (Simplify, simplify, simplify)
  • Utilize the full range of individual talents

2.3.6      THE CRISIS

Ø         Shortage of IT workers

2.3.6      COMPETITION

Ø       Compensation stock options, profit sharing, incentives

Ø       Alternatives outsourcing

2.3.7     ATTRACTING

Ø        Recruiting sign on bonuses

Ø        Relocation incentives

Ø        Recruiters

Ø        Reduced cycle time for hiring

Ø        Campus/ job fairs / referrals/ internet

2.3.8    RETAINING

Ø     Work environment

Ø     Communication forums

Ø     Telecommuting

Ø     Flexible staffing

Ø     Exciting projects

2.3.9     PRACTICES

Ø      Focus on value

Ø      Financial and human value

Ø      Commitment to core strategy

Ø      Linkage between culture an system

Ø      Multi dimension communication

Ø      Stakeholders partnerships

Ø      Mutual support and collaboration ( teamwork)

Ø      Risk and innovativeness

Ø      Passion

2.3.10        DEVELOPING

Ø      Internship programs

Ø      Training programs

Ø      Career development programs

2.3.11         LONG TERM SOLUTIONS

Ø         Education, government, industry partnerships

Ø         Curricula: technical skills and career skills ( teamwork and communication)


  • Understand people

  • What they want

  • Long term perspective’

  • Innovative

  • Co ordinated approach

  • Career development I

2.4           OUT SOURCING

2.4.1               In the last few years, more and more companies around the world are looking towards India for outsourcing their software requirements. The changing business environment is demanding new applications. In particular, the spread of client-server computing in decentralised organisations involves the development of applications specific to a user's business.

2.4.2               Outsourcing is becoming a strategy for forward thinking IS managers. It is no longer just a means for reducing costs, but a tool for adding value to business. It enables organisations to concentrate on their core business, carry out business re-engineering and provide information that is valid, timely and adequate to assist decision making at the management level and quality and cost control at the middle and lower levels.

2.4.3               As a result, outsourcing has gradually grown beyond the traditional idea of "having a third party running the data centre". It has come to mean, "any use of an outside contractor to replace or extend in-house resources".

2.4.4               Outsourcing is closely linked with corporate strategy, since it must support the organisation's major initiative in using IS. It should enhance and add value to the business. A rule of thumb to start and gain experience is, "if IS is low cost and of high value addition, keep it within the organisation, i.e. in-source. If IS is high cost and of low value addition, consider outsourcing".

2.4.5               In the past few years, whenever organisations around the world have outsourced to India, the Indian software companies have substantially helped to cut costs in software development projects or MIS environments, while maintaining high quality. Moreover, all these cost and quality advantages are coupled with the use of state-of-the-art technologies.

2.4.6               In  2004-05  more than US$ 2500 million worth of software development work was outsourced to India (The total software exports from India during the year was US$ 4085 million). This was 56% higher than outsourcing orders in 2003-04. It is estimated that  the quantum of outsourcing may jump to US$ 5 billion  and reach as high as US$ 10 billion by 2010 A.D.


Find the 1st Chapter ....................HRD MANAGEMENT IN IT INDUSTRY


Find the next chapter.................HR  PROBLEMS OF INDIAN IT  PROFESSIONALS

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