Outsourcing in India: A View From the Recruiting Trenches

by Gita Dang

The best laid IT plans sometimes go unappreciated by users

After just eight days on the job, Sanjay (not his real name) stepped down from his position as head of the 200-person India-based development center of a European multinational corporation. Sanjay was a young, dynamic manager with the assertive style and blue-chip resume that tend to impress Western employers. Following a lengthy search led by a recruiting firm, the hiring company’s management team was completely sold on the candidate. He had everything the interview team had felt the other local candidates lacked: youth, charisma and confidence. Moreover, his background was a veritable who’s who of prestigious employers. Everyone was dumbfounded when the new hire failed after little more than a week.

That is, everyone but the recruiter. An Indian national, she had cautioned the client repeatedly that despite Sanjay’s energy and presence, he lacked the requisite experience and credibility to lead a team of senior people, according to Indian culture. The Indian business environment is a hierarchical one that venerates seniority and considers gray hair a sign of wisdom. The hiring firm’s interview team had previously rejected more senior candidates because they seemed older or more soft-spoken than one would expect in the Western world. But in reality, these contenders would have enjoyed far greater organizational support than Sanjay eventually did. To the India-based development team, Sanjay came across as too junior and brash to win respect. It was a classic example of culture clash.

Managing Expectations

Sanjay’s story is but one illustration of the pitfalls of projecting the hiring expectations of one culture onto another. As an executive recruiter leading Korn/Ferry International’s technology practice in India, I have witnessed firsthand the trials of Western companies struggling to bridge the cultural gap as they put local teams in place. They soon discover how futile it is to superimpose developed-country standards on a relatively immature talent market for senior global managers. Although the talent market in India is evolving rapidly, it’s doing so in a hybrid fashion.

For this intricate market, the most important piece of general advice that I can offer is to abandon all preconceived notions: how a job should be structured, the types of candidates that are available, what profile would be most effective, and even where a job should reside geographically in India. Companies frequently start out with very specific expectations, only to find that the desired candidate doesn’t exist in India. To meet organizational needs, the hiring company eventually resorts to breaking down the job functions into multiple positions in order to bring together the skills and experience required. Flexibility is paramount. Qualifying the Candidate

Tricky cultural differences extend far beyond composition of the actual talent pool. The interviewing process itself is fraught with nuances that can make or break a search. The Indian talent market is highly fluid and tightly networked. Throughout their careers, many senior people have secured positions through social circles. In a tight community, prospects are apprehensive about speaking to potential employers or recruiting firms.

The use of a reputable search firm noted for discretion and integrity can go far in alleviating candidates’ privacy concerns. But even once engaged in a dialogue about an opportunity, some still refuse to offer references for fear of spawning rumors of their candidacy into a tightly linked social network.

Other implications of India’s interconnected society are less obvious. For example, the interview comportment of an Indian executive who has moved into new positions through personal relationships without ever interviewing will be different from that of a Western candidate who has navigated through hundreds of interviews. Prospective employers need to adjust interview expectations accordingly.

Lack of talent mobility within India often surprises Western firms. In the past, talent flowed readily to locations providing opportunities. Today, Indian nationals are averse to relocating, even for plum opportunities. The reasons are many: reluctance to move children from schools into which admissions are very competitive, responsibility to care for parents or strong cultural differences between regions. Even more important, however, are increased career options in the city where an executive resides.

The Package

Cultural differences continue to surface long after an employer selects a candidate. For example, Indian compensation packages can seem baffling to Western employers. In addition to performance bonuses and standard benefits, packages typically include perks such as housing allowances, paid utilities, furnishings, a company vehicle (including driver, maintenance, fuel and insurance), education, medical insurance and expenses, club memberships and dues, and unlimited business entertainment expenses.

Another key element of an offer is the appropriate external title. The Indian culture is extremely hierarchical; hiring companies will need to determine a title that is acceptable to both the candidate and his peers. In India, it’s also commonplace to waive clauses such as references to termination, noncompete agreements and severance.

Sealing the Deal

Sealing the actual deal can require a concerted marketing effort. U.S. employers in particular are notorious for their near-term focus. Although Western influences are becoming more prevalent within the Indian business culture, a seeming overemphasis on youth and on fast delivery can seem perilous to candidates from a culture that honors and rewards seniority. Some companies have overcome this mistrust. Just as businesses can brand themselves as providers of quality services and products, they can also cultivate and promote a reputation for creating a positive workplace.

But even companies taking positive measures to help attract local talent can find their efforts thwarted. Anxious to retain employees in a highly fluid labor market, Indian companies will take radical, aggressive countermeasures ranging from dizzyingly generous compensation packages to extreme emotional pressure not to leave the company.

With some insight into the Indian culture, Western employers can use to their advantage the very things that make the Indian talent market perplexing. For example, the tightly networked Indian culture provides a powerful mechanism for sourcing candidates through employee referrals. A local expert can advise you on the cultural differences and on how to brand your firm. But by far, the most critical success factor is remaining open to adapting your human capital strategy to the reality of the local market. After all, the selected candidate has to be effective in the environment in which he works.

Gita Dang is a senior client partner with Korn/Ferry International and head of the firm’s global technology market for India.

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