Monday, August 22, 2005

Better workplaces

One of the 'key takeaways' (so to say :P) from freakonomics is the concept of incentives guiding most of human choices. Levitt divides incentives into three types - economic, social and moral.

Now there's this article in the recent Sunday Times here with A.M.Naik - Chairman and MD of L&T - lamenting the fact that its losing most of its engineers to the IT industry, and predicting a sad future for India's infrastructure setup if this trend continues. But just consider why? the economic incentives - India's IT sector pays its engineers much higher and has better work conditions than what the old economy companies can match, at the same level - plus add the perks of the periodic international travel; the social incentives - working in the IT sector is 'hip' - it’s a source of pride for people today to say they are working in an infy or a tcs, leave alone an MS or an Oracle (just look at the number of parents who brag about their wards working an IT company vs those whose work in old-economy firms). It has simply become a socio-cultural aspiration to work in IT. Just appealing to the youth on a moral ground won't work as everyone seems to have gotten used to the fact that IT is adding to India's economy - after-all its India's poster child for our new-found growth. What old-economy majors need to do to attract and retain the best of talent is to provide better economic and social incentives to youth as they enter the work-pool. This translates to not just paying more, but projecting a more 'cooler' image of the workplace. A very challenging mandate, I agree. We certainly live in interesting times :D
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