In the 80s and 90s, anyone competing against Andersen Consulting (now Accenture) knew to invoke the "school bus" image. That of armies of young staff showing up at client sites.
So, I am reading Consulting Magazine and I see TCS, the largest Indian vendor, plans to hire 30,000 associates a year, most straight from universities. The other larger Indian firms have similar models. Indeed, the Indian industry has an established term - "freshers" - for such recruits. Differently from Andersen though, these young staff do not show up at client sites. Indian firms do 60 to 80% of their work at their centers in India. So, instead of "school buses", can we invoke "day care" for this staffing model?
OK, enough teasing. When I co-founded a company with Brian Sommer, who spent his life at Andersen, we recruited through his network several other Andersen alums. I found them to be a highly disciplined and driven group. These were 6-8-10 years out of college, had worked on a wide range of challenging assignments, but kept the work ethic Andersen had instilled in them from day one of basic training at the legendary St. Charles center.
Of course, Andersen had to manage the challenges of a young staff model. Brian told me he dreaded certain days of the year while at Andersen - when staff resigned in numbers on their second or third year anniversary. They had done their time at Andersen U and were moving on.
The Indian firms are finding the same advantages and challenges Andersen did. Indeed with India having one of the youngest work forces in the world, the opportunity is even greater. But high Indian staff turnover is also the result of that model. Their staff do not want to just work in the remote centers. They want to see the world and be at client sites - and a firm which promises them that steals them. Also, they are tired of seeing themselves billed at 5X, sometimes 10X their wages, and want a bigger piece of the pie. So a 10 to 20% raise is enough to entice them to move.
But the larger issue is that of customer value. The middle of the pyramid in a service firm is typically the highest value add to a client. Especially in areas which require deep vertical knowledge. Complex program management skills. Change and governance management. And just plain ability to communicate effectively with client executives.
The middle of the pyramid was always a challenge for Andersen to fill (and allowed us competitors to keep Andersen from running away with the market). And Andersen's culture made it difficult to recruit from the outside - those who did not have St. Charles in their resume. An Indian executive recently told me after growing 30% in the last few years, his biggest single constraint to even more growth was good executive and managerial talent.
I have written before about Prof. Prahalad's Bottom of Pyramid opportunities. He shortens it to BOP.
The challenge for Indian firms is to build up the MOP...not just their BOP.
...The MOP to clean up the Day Care centers -)
Sadagopan responds and argues the investments in training the Indian firms are making are impressive. I agree. If I remember correctly Andersen also spent 6 to 7% of revenues on training - much higher than its competitors. But that does not by itself change the staffing mix or develop MOP if attrition is high. Some customers want results, don't care as much about the team. Others focus on the team. Right now the younger staff model of many Indian firms represents the Andersen model of the 80s and 90s. Some clients will accept it, others will not.