Infosys mirrors India plan, eyes more campus hires in the US

BENGALURU: Infosys has been strengthening its base of college graduates in the US over the past two years, leveraging strong university connects. The idea is to mirror the strategy in India, where IT services companies have a broad base of young employees, a base that is built through campus hiring.
Infosys has already surpassed its commitment, made in 2017, to hire 10,000 American workers at its US operations.The company does not disclose how many of these are campus recruits, but sources say a growing number is from universities. It has set up half a dozen technology centres to onboard the talent pools of the future, including the newest one in Arizona where it plans to hire 1,000 people by 2023.
Phil Fersht, CEO of US-based HfS Research, said Infosys is investing in a unique model in the US where they are building the base of the pyramid via astute alliances with local community colleges where students are offered an Infosys digital qualification as part of their apprenticeship programme.

“With client demands shifting to more business aligned needs enabled by technology, with closer intimacy and geographic placement of staff, the use of subcontractors is less appealing as they are often not aligned with Infosys culture and changing client needs (not to mention they are costlier). I see their evolving approach as genuine innovation in global service deliver and others are trying to follow suit,” he said.
Under pressure from the US administration to localise fast, Indian IT services companies have so far tended to depend on subcontractors who supply staff. But subcontracting expenses are rising fast. For Infosys, this expense rose by 40% to Rs 6,031 crore in 2018-19, compared to Rs 4,298 crore in the year before. In the first three quarters of this fiscal, the rise has been only 13% compared to the corresponding period last fiscal, a result of the company focusing on building its own employee base through campus recruitments.
Infosys’s peers are still seen to be top-heavy in the US. “You’ll see our numbers on subcon costs are well below our peer set. Subcons are quite necessary in this industry to make sure that there is – short-term demand has been met or the special skills. But what we’ve been doing now is at the tail end of the subcons, we’re trying to replace them with our own employees...So, you see our subcon costs have been quite moderated in the last few quarters,” Infosys CEO Salil Parekh said in the December quarter earnings call.
Rod Bourgeois, head of research in DeepDive Equity Research, said digital services businesses are greatly in need of developing specialised pools of next-generation talent with good proximity to enterprise clients. “Universities and students can garner very marketable skills and experiences by collaborating with IT services firms, which in turn can better scale and tailor their staffing models to compete in the rapidly-growing digital services arena,” he said.