Saturday, 5 November 2005

Recruitments & work-experience

I've been trying to think over how companies plan and manage recruitment. Comments welcome.

Companies seem to be planning their growth targets in terms of headcount. It's not rare to come across headlines in newspapers like "xyz to be 10,000 strong in India by Dec 2005." Well, having a measurable growth target of this kind is fine, really. And to measure attrition, they release another headcount -- again, in terms of numbers or percentages.

Though companies measures their personnel growth & attrition through the number of people who join or leave the company, they don't usually publish the number of person-years of experience that has been added or reduced in any given year.

Think about it this way -- let's say I run a startup with 10 people who've got about three years' experience on an average, my staff therefore has a net experience of 30 person-years. If all of these people continue to work with me for another year, the average experience of my staff increases to four years. Even if a person leaves my company, my staff's cumulative experience is still 6 years more than what it was last year, inspite of a 10% attrition.

Let's look at the other aspect. Let's say I start recruiting, and I add in another 10 people to this startup -- 10 college grads with zero experience. Yes, I've doubled my company's headcount, but have I added anything to my net experience? No. Have I added to the company's maturity? If there is a direct correlation between experience and maturity, the answer's again "No". So, what have I added? I've ensured that as these people learn in my company, I am assured of a higher net experience one year down the line! With my staff of nine, I would have had at the end of next year a total experience of 45 years. With these additional ten recruits, I've upped that to 55 years. On the other hand, if any one of my recruits was a person who'd already been in the industry for 10 years, my net experience would jump up by another ten years.

Perhaps, companies' HR teams do actually relate these two factors -- total experience and headcount and build a profile of the average experience of company's personnel. If the average experience of a company shows a gradual increase over time, it probably indicates a) steady growth, and/or b) low attrition. Sharp changes in this average-experience figure would indicate that a company's going through a) an exodus of employees or b) inorganic growth (or disintegration) of some kind. Of course, the greater a company's headcount, the easier it can absorb these shocks of changes in average-experience.

3 comments:

Chakree said...

Chiranth,

Good one....!
I think there are many factors that influence the recruitment.

Some companies would recruit or alteast target to recruit people in large numbers either to place themselves as much larger companies than they are currently (small to medium etc) or to attract bigger clients. Coz., Strenght does matter to some to the customers apart from revenue of company. Again head count and total number of yrs of experience is debatable here.

And, what is the kind of experiece you are talking about??
Technical or Domain experience or its just number of yrs of work expr??
Say, Company has 10 people with 4 yrs experience in 10 different domains or technologies.
What happens one person leaves after serving for one year??
How would the company stand in terms of Techical or domain expr??

And about HR. I seriously doubt they do such analysis. Atleast not in the small and mid sized companies ;).
All they do is push the recruit process according to the urgency of the projects....
May be someone in the HR would give an apprioate answer.

KARTHIK NARAYANA said...

Umh impressive analysis, according to my knowledge this has to be analysed for two different scenario. One for a product based company and the other for a services based company.

For a product based company, the head count doesn't matter and the average experience matters a lot.

For a services based company average experience doesn't matter, the head count matters. Most of big companies pose of a huge headcount which is considered as a major criteria for grabbing project. Thats the reason at any point of time you can see lots of people on bench in such big companies.

Satyamurthy Kotni said...

Hi Chiranth,

Always what client expects is different people in different levels, so that they can expect people available there for different activities.

a. Technical requirement might be solved by technical hierarchy

b. Project management wise client wants different set of people for making sure you stick to the project time, as for bigger projects client have different teams involved in the project. so want them to complete the project on time for having fruitful results.

c. Big team is required for giving the client the extra cushion for the escalations which gives extra comfort to the client.

d. If people meet atleast 65% of their skills in these levels it makes sense.

So always clients more and more people involved in the project in different levels as it's easy for them to handle. especially people from client side who are very buzy can't meet everyone so they want to have few points of contacts for interacting.

So having big team always makes lot of benefit for the client. Yes, experience matter as far as technical aspect is there.. but once technical aspect is covered all this comes into picture and experience in their own area's gives extra help for the company to grow further.

But if you got smart people with less experience, but who can pick up skills faster makes lots of difference for the growth of the company. As if clients doesnot like the type of service provided by the team then it has got impact on whole team. But always client takes some time to judge on the team, so within that time the team should come back that's more important.

This is what my personal thought about the impact of numbers in the company.

-Satya