L&T Infotech withdrawing offer letters opens our eyes to new realities in job market
For Anil Manibhai Naik, 72, Chairman of Larsen & Toubro (L&T), events have turned full cycle at the 73 year-old company. Just a decade ago, he used to lament about the dearth of talent in the engineering business, with engineering graduates choosing IT, financial services and retail as careers over brick and mortar businesses such as manufacturing and construction.
He made headlines then, as he took on IT czars for weaning away engineering talent to software firms. Today, one of L&T’s group companies, L&T Infotech, is facing flak for withdrawing jobs it earlier promised to thousands of engineering graduates on the pretext that they "failed" in a final "assessment" test the company conducted. Surely, Naik, who has confessed in earlier interviews that he floated L&T Infotech to attract and retain talent - is now facing a problem of plenty.
To the extent that the company resorted to an unprecedented, surprise assessment test for 2,000 candidates who were already given the offer letters, and even sent congratulatory letters from its HR department, the move smacks of impropriety. L&T might be well within its legal right to conduct such a test, but all reports so far tend to suggest that the intent was to further delay recruiting some 1,500 candidates who failed the test.
The tirade against the IT firm from youngsters on social media points to the fact that a respected brand (drawing upon the brand recall of the parent firm) should have been more discerning in its commitment of jobs to youngsters, and should have been more forthright in communicating the delay to the candidates, rather than weed them out using a strange examination process that had tough questions that were bound to fail them.
The disappointment seems to spring from the fact that many thought a firm like L&T would be different from a Flipkart, which raised eyebrows and came in for severe criticism from business schools after it deferred the joining dates of IIM gradutes it offered jobs, to December this year from May. This triggered efforts among B-schools to exercise more caution in dealing with start-ups in general during the placement process, and dilute the "one student one offer" norm, which at present restricts students from facing multiple interviews.
No one seems to bother about the stress the e-commerce company was going through, with investors such as Morgan Stanley Mutual Investment Trust, marking down its valuation for two successive quarters. The message was clear: start-ups were unpredictable, and needed to be warned that they better stick to their offer commitments, or risk losing their chosen candidates to others.
This seemingly arm-twisting tactic falls flat as the news of events at L&T Infotech comes in. Will the business schools and engineering colleges take a similar approach to L&T Infotech in future and caution them that all offers to place those students should be followed by a time-bound implementation? Would they do so to McKinsey and Royal bank of Scotland who have deferred joining dates of recruits in the past? Or HCL Technologies or Infosys or iGate, for that matter? How many companies will they blacklist? Where will they draw the line?
The disappointment also follows a widening chasm between the picture of a high-growth economy that the nation’s leaders are gladly painting, and the reality of jobs on the ground. True, with a growth in excess of seven per cent, India has emerged as one of the more resilient economies in the world compared to flat growth elsewhere, but that growth need not necessarily translate into more employment right away.
The Indian economy went through a period of "jobless growth" when five million jobs were lost between 2004-05 and 2009-10 while the economy was growing at an impressive rate of more than eight per cent annually. The recent picture isn’t too rosy either.
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According to the 27th Quarterly Employment Survey of eight employment intensive industries - textiles, leather, metals, automobiles, gems & jewellery, transport, IT/BPO and handloom/powerloom - there were 43,000 job losses in the first quarter of fiscal 2016. Export units, reeling under consecutive months of falling exports for more than a year, have been employing fewer people.
Agriculture has seen a definite slowdown after large regions were hit by a drought. But the most notable factor is that companies, including those in manufacturing and IT, are learning to do more with less people.
In IT companies, disruptive technologies, such as Social, Mobility, Analytics and Cloud (SMAC) are offering new avenues of growth across verticals. So is Artificial Intelligence (AI). This would call for new, specialised skill sets in firms.
It also means that traditional requirements in IT firms will be replaced by new job positions such as data scientists, retail planners, product managers and digital marketers. In short, many sectors, including IT, will need lesser numbers in head count but with a higher degree of skills. That would mean companies will be more selective in campus recruitment.
That is going to be the new normal, at least as long as the clouds of the economic slowdown cast their shadow on most economies. Both job aspirants and the academic institutions they graduate from would do well to realise this fact, and gear themselves up for a rainy day. Going forward, there would be no substitute for new skill sets in modern engineering and technology, which can open up better avenues for youngsters both in India and abroad.