BMG935 International HRM
BMG935 International HRM
1. Introduction
Infosys is an Indian multinational company, which focuses on providing software-based services. The company was founded by R.K Narayana Murthy and his peers in the year 1981 in India’s Pune. The legal name of the company has been changed many times as since 2012, the company has been running a business as Infosys Limited. Infosys’ business solutions and services provide better utilisation of assets, cost-effectiveness, productivity benefits, and faster innovation (Infosys, 2023). Infosys upholds the principles of diversity and inclusion, adhering to laws prohibiting discrimination based on various personal characteristics. It also ensures equal employment opportunity in all personnel actions (Infosys, 2023).
Their integrated annual report for 2021-22 states that they employ more than 300,000 people worldwide (Infosys, 2022). Their style of employment fosters the development of ideas and gives individuals the courage to take chances. Due to their openness, inclusion, and experimentation, Infosys is able to manage this large number of employees across the globe. The global revenue of Infosys Limited increased significantly from $16.3 billion to $18.2 billion in the fiscal year of 2023 [Refer to Appendix 1] (Statista, 2023). The market value of Infosys as of November 2023 is $71.89 billion. According to the data of Companies Market Cap, Infosys holds the position of 206 in the most valuable companies in the world in terms of market value (Companies Market Cap, 2023). The IT services business has become highly competitive as a result of the introduction of numerous new competitors. Like other companies Infosys also faces the challenge of competitiveness. For instance, Tata Consulting Services has surpassed Infosys to take the market leader position in India. Moreover, contracts requiring the use of modern technology are being taken over by younger competitors. The first and foremost opportunity of the global IT industry is the emergence of Artificial intelligence (AI). AI is becoming more and more widespread, influencing both personal and professional life in many ways.
AI-driven digital assistants represent a significant application space, given their widespread availability and multitude of use cases. Moreover, the strength of Infosys is that the company offers a broad category of its services. These include software development, cloud computing, data analytics, artificial intelligence as well as cybersecurity. However, there are many suppliers in the market for technical and system software. Nevertheless, industry leaders limit Infosys’ earnings by negotiating a high price with the firm, which would reduce Infosys’ profitability (Mahajan et al. 2019). This can be judged as a weakness of Infosys.
2. Literature review of the issues faced by Infosys
Like other businesses, Infosys also lacks talent management. Infosys has heard from employees in employee satisfaction surveys that they would want to have well-defined career tracks (Infosys, 2023). With this goal in mind, the organisation is trying to define roles and streams, along with the competencies needed in each of them. This is done by matching the aptitude of their employees to their business objectives. Moreover, Infosys also faces challenges in employee wages. According to reports, Infosys reduced its employees’ average variable remuneration by 40% during the fiscal quarter that ended in March 2023 (Sharma, 2023). Since then, Infosys workers get 60% of their guaranteed variable pay on average (Sharma, 2023).
Former CFO of Infosys said that there has been no wage increase for new hires. The employees are receiving the same that employers were paying employees a decade ago. Apple, Morgan Stanley, and Goldman Sachs are also a few well-known companies that have decreased their pay to better support their employees and businesses. CEOs from a range of industries have taken comparable moves, as have other businesses. Studies found that retained workers in the demand contraction channel often faced additional health risks as a result of inadequate protective gear or workplace social distancing policies that were broken. Along with a rise in workload, retaining staff have also witnessed a decline in salary (Tejani and Fukuda-Parr, 2021). Long working hours are a common issue for information technology professionals in today’s competitive climate. The obstacles extend beyond just keeping the brilliant individuals on board by thoroughly absorbing them and gaining their minds and hearts at every turn. Studies have found that employees of Infosys also face job satisfaction problems for that (Gupta and Yajurvedi, 2020). This is why Infosys have implemented a focused strategy and make use of data and analytics to identify the precise therapies that are needed. Thus, to improve the employee experience, the company is giving each employee access to an AI assistant.
Every employee in the world will receive tailored information as a result. Infosys genuinely tries to support their employees’ needs and desires. Moreover, Infosys also uses several technologies to support their employees by reducing manual efforts (Infosys, 2023). With the help of a knowledge-based artificial intelligence platform Infosys Nia, they can continuously innovate and enhance automation by combining machine learning algorithms with their employees’ knowledge. Moreover, Infosys Ltd. employees have been required to work at least ten days per month from the company’s office. Since the covid outbreak, they have been able to work remotely full-time. This can also create several challenges for Infosys’ relating to employee satisfaction. N.R. Narayana Murthy, the co-founder, made contentious remarks in which he asked young Indians to work 70 hours per week for the success of their country (Hindustan Times, 2023).
3. International HRM issues faced by Infosys
HR specialists’ source, hire, train, reward, develop, evaluate, and encourage employees for an organisation. Nevertheless, the complexity of their work increases when the organisation’s operations extend to a global size. Multinational enterprises (MNEs) like Infosys function within distinct national contexts, each with unique institutional and cultural customs, protocols, and laws (Farndale et al. 2019). It has been found several times that Infosys does not have an efficient IHRM system. Due to this, the global employee attrition rate of the company reached 25% (Monteiro and Joseph, 2022). India’s largest IT service provider was involved in a legal dispute in the US right in 2022. The company has reportedly been accused of discriminating against applicants based on their nationality, gender, and age during the hiring process in their company (Singh, 2022). A US court has rejected Infosys’ bid to dismiss a lawsuit filed by former employee Jill Prezian. Prejean claimed that the company advised her not to hire people over the age of 50, women with children, or people of Indian origin (Singh, 2022). The lawsuit has severely impacted the company’s reputation and can weaken their recruitment.
The company’s image suffers as many Infosys employees leave in search of better opportunities and educational opportunities. It is noted that the employees left due to their previous managers rather than Infosys (Monteiro and Joseph, 2022). However, from several studies it has been found that various MNEs have faced lawsuits for gender discrimination. For instance, Former Tesla employees named John Goode, Owen Diaz, and a group of black employees claimed pervasive racial discrimination at the company’s Fremont Plant in California (Zelicof, 2023). However, Tesla denies accountability for its employees’ actions, and the lawsuits seek monetary damages in addition to penalties for psychological distress. Tesla’s lawyers made it clear that the company does not accept such behaviour. However, no action is taken towards employees who participate in the racial harassment (Zelicof, 2023). The corporation itself appears to be ignoring the repercussions on other employees. Moreover, in 2013 Infosys agreed to a $34 million legal settlement with the United States government over claims of visa fraud and immigration abuse at its Texas headquarters (Verma, 2022). Infosys applied B-1 visa holders to do skilled labour that could have been done by eligible US citizens or H-1B visa holders (Verma, 2022).
The US authorities claimed that Infosys employed low-wage workers to undertake highly skilled positions, resulting in higher profits and taxable income. A non-immigrant visa is called as H-1B permits US companies to temporarily hire foreign workers with particular capabilities. However, many organisations are looking for disruptive solutions that increase employee experience, revenue productivity, cost optimisation, and engagement (Infosys, 2023). Infosys made certain improvements to provide a better employee experience. Infosys Live Enterprise, for example, is a next-generation platform that assists CHROs in providing solutions to enhance the employee experience. It addresses issues such as agility, speed, cooperation, experience, and many other issues (Infosys, 2023). Therefore, Infosys is also trying to address IHRM challenges to make a better workplace.
4. Analysis of the issues
Issues within an organisation tend to be impactful in ensuring organisational success and maintaining proper growth and development within the market. As Infosys is an MNC operating in a global scenario, therefore, the company also faces certain organisational issues apart from IHRM that create difficulty in its operating system. In order to be specific, issues related to recruitment and selection along with training and development, pay and compensation and lastly expertise have been largely faced by the company in its operations which will be analysed below.
4.1 Expertise
Areas of expertise within Infosys include the development of software along with manufacturing, insurance, services of validation to companies in terms of finances and lastly maintenance. As per the view of Dessler (2020), the expertise of a company mainly relates to the skills and knowledge of employees that enable an organisation to accomplish targeted goals. In consideration of the financial results of Infosys, a sharp decline has been noticed in the attrition rate of the company revealing 20.9% as of 2023 which was previously 24.3% in 2022 (LiveMint, 2023). The attrition rate of the company as of September 2022 reflected 27.1% which was observed to be 28.4% in June 2022 (LiveMint, 2023). However, the total employee count of Infosys as of 2023 indicated 343,234 which further revealed a reduction of 3,611 employees (LiveMint, 2023) [Refer to Appendix 2].
As compared to Wipro and Tech-Mahindra, which are other top-listed IT players after Infosys also seems to be having high challenges in maintaining organisational expertise through a high turnover rate of employees. As of 2023, the attrition rate of Wipro and Tech-Mahindra recorded 23.3% and 22% respectively (Chaturvedi, 2022). This reveals that not only Infosys but other IT companies are also facing a high employee turnover rate within the market that is slowing down their operating notion. Apart from that, Tata Consultancy Service’s (TCS) attrition rate also increased by 2.3% in 2023 revealing a rate of 19.7% in this area (Chaturvedi, 2022). Henceforth, the area of expertise within a company is highly impacted by the rising attrition rate which can be mitigated through increasing employee satisfaction by rewards and promotion along with the implementation of training and development program.
4.2 Training and development
A localised approach in terms of training and development is mainly adopted by firms operating in the global scenario while training within international business plays a crucial and strategic role in terms of enhancing employee skills and performance level. Training within Infosys seems to be comprised of 45 variants in terms of new technology instances that further include big data, blockchain, internet of things (IOT), Microsoft, Java and others (Infosys, 2023). As Infosys seems to be operating in a fast-paced environment, therefore, it leads to high pressure of work on the employees along with tight deadlines that in turn create difficulty for the employees to accomplish organisational goals without proper training. However, the area of training and development within the company seems to be really tough as compared to other companies in this area. A failure rate of 1-2% is also observed within the training and development area of Infosys further reflecting high issues in this area (Mody, 2020). In addition to this, cultural differences within Infosys have also been observed as the company operates in a global scenario (Mody, 2020). Improper management of cultural instances tends to reflect improper training and development within the domain. Henceforth, improvement in the area of training and development through proper policies and cross-cultural instances can help the company in managing its cross-cultural issues and the high attrition rate faced by the company.
4.3 Recruitment and Selection
The process of recruitment and selection followed by an organisation is considered to be highly crucial in ensuring skills and effective workers that can meet organisation objectives. In consideration of the case of Infosys, the selection and recruitment process within the company includes a test of aptitude along with a technical interview and an HR interview (FoundIt, 2023). Effective training helps in enhancing the skills of employees that reflect a high level of performance with high value to the customers. In concentration to the high attrition rate faced by Infosys, 1.3% of the rate is contributed by the poor quality of work within the organisation (Ganesh, 2020). As a result of this, it can be stated that the recruitment and selection policy of Infosys is not proper which is creating a gap in talent management further impacting organisational operations.
Apart from the quality issue faced by Infosys that reflects challenges within the recruitment and selection process of the company, Infosys also implanted discrimination within the process of recruitment. From the current reports it can be analysed, that a lawsuit was filed against Infosys by Jill Prejean, former vice president (VP) of talent acquisition of Infosys, US in 2021. In accordance with her viewpoint, Infosys directed her not to hire women having children within the company while candidates aged above 50 were also not entitled to be hired by the company (Biswas, 2022). In addition to this, discrimination was also noticed within the recruitment process of Infosys as the former VP of the company was also instructed not to hire Indian people in the company. Not only in this area, Infosys has faced issues within the process of recruitment.
The company also faced issues in this process in 2021 were four female employees of the company filed complaints against partiality towards male workers within Infosys (Sureban, 2022). However, the current issue of Infosys within the process of recruitment and selection seems to be a major one, as other companies such as Google, McDonald’s, Amazon and others have also faced allegations of sexism and racism within the process of recruitment (Sonnemaker, 2021). Since the year 2000, 99% of companies in the global scenario have been observed to be paying settlements for lawsuits related to discrimination, harassment and others within the organisation (Sonnemaker, 2021). Henceforth, the implementation of the Equality Act within the recruitment and selection policy of Infosys will help in mitigating the current issue in this area.
4.4 Pay and compensation
The area of pay and compensation is another critical aspect within an organisation that needs to be maintained to ensure proper employee involvement, participation and motivation within the organisation. In respect to the situation of Infosys, several issues in terms of pay and compensation are faced by the company that also creates difficulty to operate in the global scenario. The compensation aspect of Infosys is shaped by a reward structure in the form of stock incentives which tends to align with employees’ interests along with the interests of organisational shareholders (Infosys, 2023). The company also seems to be rewarding employees for their loyalty. However, the postponement of salary hikes within Infosys seems to be reflecting high issues within the pay and compensation structure of the company. Nonetheless, the company seems to be announcing a salary hike in November after postponing it for two quarters (HRK, 2023). In addition to this, the compensation of the CEO of Infosys dropped by 29.3% which reflects the poor financial condition of the company and also supports the reason behind delayed salary hikes within the company (Phadnis, 2023). Similar to the notion of Infosys, other IT company such as TCS has been committed to rolling out their salary hike from the first quarter of 2024 with 12% to 15% hikes for the top performers. Similarly, Wipro is also likely to start its hike in December 2023 (LiveMint, 2023). Henceforth, securing proper investors and implementing a reward system for employees will mitigate pay and compensation issues of Infosys.
- Conclusion
Infosys faces challenges in talent management, wages, and job satisfaction. Employees desire well-defined career tracks and are seeking better pay. The company’s inefficient IHRM system has led to a 25% employee attrition rate. Infosys has faced legal disputes, including allegations of discrimination based on nationality, gender, and age. Infosys has also agreed to a $34 million settlement with the US government over visa fraud and immigration abuse. Furthermore, training and development are also challenging, with a 1-2% failure rate and cultural differences. The recruitment and selection process are also not proper, leading to a talent management gap. Additionally, the company’s pay and compensation structure are also problematic, with stock incentives and loyalty rewards being postponed. This has led to a drop in the CEO’s compensation, indicating poor financial condition. Other IT companies like TCS and Wipro are also facing similar issues, highlighting the need for improved pay and compensation structures.
6. Recommendations
From the section above it can be analysed that Infosys in the current scenario is facing issues within its recruitment and selection policies followed by pay and compensation, training and development alongside expertise. In consideration of the issues that are being faced by the company cross-cultural training and management can be recommended. It is because Infosys is weak in managing cross-cultural instances which is also reflected in the high employee turnover rate and poor quality of performance within the organisation. In the opinion of Torrington et al. (2020), cross-cultural training and development help employees manage different cultural people and different perspectives while enhances expertise within the workplace environment. In addition to this, securing proper investors can be recommended to Infosys based on the issue of pay and compensation faced by the company.
According to Khan et al. (2021), securing proper investors helps a company to maintain pay scale and secure proper raw materials that in turn, enhances the profit margin within the company. Apart from that, the Equality Act is also recommended to be implemented within the recruitment and selection policy of the company. Based on this, Infosys will be able to remove discrimination from the process of recruitment and selection further enhancing equal treatment for all the employees in the company as well. Other than that, the recruitment of a proper Human resource (HR) manager is also necessary for identifying potential candidates that can serve organisational benefits. Henceforth, the stated recommendations are likely to be effective for Infosys to mitigate current issues.
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