At a time when companies are struggling to convince their employees that working from office can’t be all that bad and they should get back for a happy reunion, Nagarro, a digital engineering major that has offices in 32 countries and employs about 17,000 people — about 13,000 in India — swears by the ‘work from anywhere’ model. Across the country, the company has also been opening ‘Hives’, which allows engineers from tier 2/3 cities the option of working out of the office as well. The Hive creates a local network for socialising, brainstorming and even doing social work, while collaborating remotely on global projects with colleagues from across the world. It provides them with the opportunity of having both the comfort of one’s hometown and a truly global job. In an interview with businessline, the Frankfurt Stock Exchange listed company’s Co-founder and CEO Manas Fuloria shared his thoughts on the forces driving and shaping the industry and the roadmap for Nagarro. Excerpts:
Can you explain the thought process behind your conscious decision to fan out to tier-2 and tier-3 towns?
We have always been focused on the idea of borderless world. The cool thing when we started the company back in the early 90s is that people from across the world can collaborate and we don’t need permission to shift goods, in the traditional sense. You can send it over a wire. You could be a techie in Moscow or California or India, and we could be speaking the same language of technology. We are also tuned into the same news streams, new technologies and share the same excitement. We have always tried to see how far we can take that. In fact, about 5-6 years ago, we acquired a company, which had about 40 people spread across 15 countries. We took inspiration from that. Even in our Gurugram office, we try to spread people across buildings. So, our focus has always been on the virtual. Then came the pandemic, and suddenly, everybody was talking virtual. We did not want to look at it as an interim arrangement. In fact, we see the pandemic-triggered WFH as a lucky leg-up for our concept. So as the lockdowns begin to ebb, we decided to go to people where they work. On the one hand, we dissuaded managers and clients from calling people back to office…we put all sorts of obstacles in their way! On the other, we started toying with the idea ‘what if we were in 100 cities in India’ and in many, many cities across the world where we operate. Generally, we think of diversity in terms of internationalization. But even in India, we have so much diversity and we are excited about that.
But what you are advocating is diametrically opposite to the position of some of biggies of the industry on the subject. I am sure there are some real challenges here…
Yes, TCS has just asked its employees to come to the office at least for 3 days in a week, and I am surprised the company is pulling back from the 25/25 model it had advocated very early in the pandemic. I have tremendous respect for TCS. I think they have built a very fine model and they understand it very well. Just that it is not our model. Our mission has always been to make distance irrelevant between intelligent people. We want to connect the world, beyond our business. When we work with the clients, we don’t work in a ‘over the wall’ model where they give us something and tell us ‘go build this and come back to us’. We work very intimately with the clients on fast-changing topics, which are of great criticality to them. And these are not defined when they start out. The projects are also vaguely specced out. Then the definitions come, changes come, alliances come and partnerships come… So, we anyway adopt this model. In fact, when we conducted a poll among our employees a few weeks ago, 75 per cent said “we love this model” (WFA), 20 per cent said “we quite like it” and around 4-5 per cent said they have some challenges. So, the talent is loving it. Of course, managers’ job becomes lit bit more complicated. But if you decide this is the way we have to do it, like we did during the lockdown, then you start to build the infrastructure. And it is not just the physical infra, but also investment in physical meet-ups. We also need to invest in digital assets to connect people. We always collaborate at project level. But we have to see how we collaborate at the company level. We also need to give people the opportunity to meet locally, meet their project mates regionally and meet their compatriots globally at a certain rhythm and cadence, through the year. We don’t want to invest as much in buildings as in making people meet.
And the concept has started yielding results…
Yes, employees’ and customers’ satisfaction levels have been at the highest that they have ever been. And it’s great for our smaller cities and great for national integration. We have young people living the lives that we wish we could have lived…travelling all over, taking photos and making videos, and posting them on the Net. So as long as you have a Net connection and willing to put in your 8 hours, how does it matter where you work from.
Earlier, many clients are said to have raised the ‘confidentiality breach’ flag…
Our experience so far has been good. Not that no client has asked us to get back to office. But no one working on projects related to India have been asked to come to office. Of course, we have people working on client sites as well. But most clients are okay with WFA. I believe that as the industry progresses, the real challenge will be in attracting top talent, as AI will make software easier to write. So, you don’t need this relatively low-skilled talent. But we need top talent that understands business context, what needs to be done and all of that. The real cream of this group needs to be pampered.
What about the triple whammy that the industry is facing? Revenues and margins are getting squeezed due to lower IT spend, attrition is spiking and there is a struggle to find the right kind of people…
I think one of the really lucky things for us is the slightly self-correcting nature of the industry. Software accounts for a lion’s share of India’s exports basket with bulk of the global IT happening here. People who work here don’t work anywhere else. When the margins drop, so do wages. If currencies move, wages move accordingly. If margins, wages and currencies move in a certain way, then the billing rate changes. We are not an optional industry. We are providing both basic ‘keep the lights-on’ support and are also part of key digital transformation projects that are so critical to many industries. So an automaker today is not going to say ‘we don’t need the connected cars or we don’t need this or that’ because these are critical to their own reinvention. So all industries need us for reinventing themselves. That’s why I say it is a closed system. So there may be a lag, which could be quite painful. But in general, the system corrects itself. These are difficult times but it is not a dangerous situation for well settled companies. This industry will not be as badly hit as some of the other industries. And, when the situation improves, this will be also be the first and fastest to recover as our past experience shows.
As far as attrition and the ‘Great Resignation’ are concerned, it is not just about people wanting to stay put wherever they are. There is also wage inflation at play here. But the situation has changed dramatically in the last few weeks. Our attrition is coming down. It has much to do with the kind of money that is being pumped into start-ups and into companies operating in sectors like Edtech. These companies are willing to pay 2x-3x more to attract talent. But most big companies have a responsibility towards their employees. They don’t hire and fire employees as start-ups do, except for good reasons. And the big companies already have employees and they have to match the existing wage and business model. Of course, some of the exits are due to people wanting to work in different places and not willing to move.
And that’s why we have managed to grow the fastest in the last two quarters by hiring talent where it wants to be. I am glad that we could make people feel happy with our model and we would really love to see the industry adopt this going forward.
Published on
September 25, 2022
