The bargaining power of Indian IT companies with respect to entry-level employees is at its peak with real wages at their lowest in more than 15 years
Indian information technology (IT) companies are witnessing improved demand without much pressure on wages due to significantly better supply of engineering students coupled with changes in business model. "This time the usual acceleration in wage pressure that accompanies improving demand seems absent. Attrition has remained low and wage inflation remains in single digits. We note the bargaining power of companies with respect to entry-level employees is at its peak with real wages at their lowest in more than 15 years. While some of the reasons for this may be cyclical and could reverse, we believe that part of the reason is structural, too," says Credit Suisse in a research note.
According to the report, a number of markers point to the lack of this pressure on IT companies. For instance, mid-sized companies such as Tech Mahindra and Hexaware have been able to postpone wage hikes without any significant increase in attrition. Tata Consultancy Services (TCS)'s guidance of entry-level hires is the same as FY09 despite twice the overall employee base and a vastly different outlook (more positive) on the demand environment. The necessity to hire from campuses 18 months in advance, as has been the case historically, seems lower now, it said.
An improving demand environment has not caused a spike in attrition this time
Significant improvement in supply of engineering talent
According to Credit Suisse, the capacity at engineering colleges in India has seen growth of over 20% CAGR over the past six years. While the quality of some of the colleges may be varied and the graduation rates may also vary, supply has increased over the past few years.
Intake capacity of engineering colleges saw an over 20% CAGR over the past six years
Given the significant oversupply, engineering colleges are now focusing on forging close relationships with the top-tier Indian IT companies. Industry efforts to incorporate their training programmes in the regular engineering degree curriculum are gaining traction. This can help companies reduce their cost of training employees and the time to ‘on board’ them, the report added.
Changes in the business model
Given the larger scale of Indian IT companies, Credit Suisse said, the higher proportion of fixed price work and some amount of automation, it believes that companies can continue to improve utilisation even beyond historical highs.
The companies are also focused on ‘non-linear’ avenues of revenue where revenue can grow much faster than headcount. Platforms are one such avenue. Also, the faster growing service lines such as infrastructure services are much less linear compared with traditional application development and maintenance, and package implementation. Further, the process of software development has become less complex in certain areas due to the reusability of code, and the development of tools and platforms. As a result, a number of positions can be filled potentially with non-engineering graduates, the research note said.
According to Credit Suisse, Indian IT companies have also stepped up overseas hiring. It said, the companies have entered new areas of IT services where local talent and expertise become important. Also, given potential immigration issues and the difficulty in getting visas, companies have ramped up hiring onsite at the cost of local hires. While this may create margin issues, it does ease the pressure on wages domestically, it concluded.
Sometimes, doctors make mistakes and consumers file complaints. Some of the complaints are genuine as in case of Anuradha Saha decided by the Supreme Court, for medical negligence. But what about genuine and well trained doctors who care for the patient?
“Men who are occupied in the restoration of health to other men, by the joint exertion of skill and humanity, are above all the great of the earth. They even partake of divinity, since to preserve and renew is almost as noble as to create.”
Medical profession is a serious business and a noble one at that. We have obligations to society for the exalted position we enjoy. One must try and understand the medical profession within the context of the recent Supreme Court (SC) judgment that stirred up a hornet’s nest. I am happy that Anuradha Saha’s loss has been adequately compensated, but I’m also equally concerned that the SC judgment might further escalate the corporate sickness industry’s bills and might make it impossible for an ordinary person to get treatment. No one can question the wisdom of the learned judges who had to go by the evidence, while at same time kept their emotions at bay, to deliver their verdict. Rightly so! Now, the doctors’ indemnity insurance will go through the roof and many doctors will be unable to afford it, unless they join the corporate juggernaut.
Now, comes the dark side of the moon. Why should only doctors work in the villages, look after the poor and the downtrodden, round the clock without any time of their own? If a lawyer charges lakhs per hour of his/her time, the doctor is not supposed to charge like that? IIT, IIM and MBA graduates—most of them—leave the country immediately to work abroad. Nobody bothers about them but if a doctor wants to charge patients, people fault them. The tax payer pays for all of their education equally anyway, except for the ones who pay through their noses to get admission and degree at many of our (in)famous private universities. The bribe might run into crores these days.
We are all come under that same umbrella; no human being is infallible but why does society and the courts find fault for a wrong diagnosis? If my interpretation of the act is right, we are supposed to exercise due care to see that we do OUR best to the patient. Medical diagnosis is not as easy as it is made out in the press. There are no black and white areas in human physiology. Imponderables abound in the diagnostic arena. Even in the best centres in the world, where they pool the wisdom of many people in difficult cases, at least 12% of the patients’ medical diagnoses could only be made on the post-mortem table. No patient’s death can be predicted or prevented no matter how good a doctor is. It is very difficult to even give a right prognosis. No doctor can predict the unpredictable future of the patient although we have been doing that.
We are, to a great extent, responsible for this exponential growth of consumer cases against doctors. Firstly, we assumed greater powers than we really have and, many a time claim to do wonders. We are no longer humble enough to state that we only dress the wound and nature (God) heals. We have taken medicine to the market place to make big money. That has brought in its wake the market forces working in our area also. In truth, the medical world revolves around faith of the patient in his doctor. It is the confluence of two human beings—one who is ill or thinks he/she is ill comes to seek the advice of another in whom the first has confidence. This confidence works wonders even in healing. Unfortunately, this holy relationship between those two human beings no longer exists in corporate hospitals. It is like the assembly-line work. Modern medicine in this century has become a corporate monstrosity according to a study by Hillary Butler, in London.
As long as the doctor is sincere, he/she works very hard to get at the diagnosis, taking into account all the available data. But, the doctor should document all these efforts to show that he/she has done all that needs to be done for “reasonable care” of his/her patient. Of course, in all these cases, there should be no wanton negligence at any stage. Communication skills are vital in keeping the patient and his near and dear ones in the picture all through the time that the patient is under care. This would go a long way in avoiding unnecessary litigation.
A second opinion is another safeguard against litigation. In hindsight, one might be able to do better. However, in an emergency situation there is the added element of urgency to intervene which will not be there for the reviewing doctor, court or, a witness, for which the primary doctor is denied.
Another area where the problem gets complicated is the jealousy of our own brethren who might inadvertently create a situation where patient’s relatives become suspicious. If a patient’s health worsens and is then shifted to another hospital, then someone there might inadvertently say, “if only you had come early we would have been able to do lot for the patient.” This single sentence is the most important abettor of consumer complaints.
These days the massive bills generated in most corporate hospitals work as seeds for litigations to grow. In some instances, the grievances are genuine: Keeping dying patients in the intensive care units (ICUs), dead patients from wheeling dead patients into the ICUs, on ventilators, before being declared dead, admitting healthy people for all sorts of tests and scans, abdominal deliveries where normal delivery was feasible, operating on the wrong side or wrong limb, leaving operating instruments inside the patient’s body, administering dangerous wrong medications, all fall under the genuine list of consumer court complaints. However, complaints regarding the competence of a fully qualified and licensed doctor fall in the grey zone.
“Is it not also true that no physician, in so far as he is a physician, considers or enjoins what is for the physician's interest, but that all seek the good of their patients? For we have agreed that a physician strictly so called, is a ruler of bodies, and not a maker of money, have we not?”
-Plato (BC 427-BC 347)
(Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS. He is also Editor-in-Chief of the Journal of the Science of Healing Outcomes, chairman of the State Health Society's Expert Committee, Govt of Bihar, Patna. He is former Vice Chancellor of Manipal University at Mangalore and former professor for Cardiology of the Middlesex Hospital Medical School, University of London.