Satyam issues raise customer staffing concerns
Indian outsourcer Satyam has made restoring employee confidence a top priority after it was rocked by a $1bn accounting fraud.It knows its very existence depends on the technology skills of its delivery staff.
Satyam's employees work on mission critical projects forthe company's business customers. They are treated as part of the workforce by many customers.
Within a day of news breaking about the fraud at Satyam more than 14,000 Satyam workers puttheir CVs on the web, according to Kris Lakshmikanth, CEO at Indian recruitment firm The Head Hunters India. He says that individual Satyam staff and project teams are weighing up their options.
But Aloke Palsikar, head of Satyam in central Europe, says that staff turnover rate has remained unchanged.He says the company is ensuring its staff are informed of developments every day to ensure they remain motivated. "They need to know everything and not be left to fill in the blanks."
"The staff have played a key role because all of our customers have said they have not seen any drop in services. If customers do see any drop in services they will have no reason to leave us."
Palsikar admitsthe fact that the global economy is slowing down has probably meant that fewerstaff have looked for new jobs. "In the current situation their options are limited. Had the economic situation been better more people could have had the choices to explore, but whether they left is another matter."
But David Roberts, CEO at The Corporate IT Forum (TiF), says the Satyam case has taught some businesses alesson in business continuity planning. "There are a handful of businesses that are so dependent onSatyam that they have sent staff to Satyam in India to discuss business continuity."
"If there is an enhanced risk at a supplier there is a risk to their own businesses. The failure of a supplier to provide products and services is a show stopper for businesses," says Roberts.
Andy Gallagher, consultant at Compass Management Consulting, sayshe would not be surprised if customers were trying to get the Satyam staff they use on board to avoid losing their skills.
"If you were a Satyam customer and had the opportunity to make sure you secured the people with the skills you needed you would probably be looking at what your options are." But he says they will have to establish their legal position first.
"It is all going to depend on the terms of the contract between Satyam and the customers," says Mark Lewis partner and head of outsourcing at law firm Berwin Leighton Paisner.
"Many of the Indian outsourcers are heavily dependent on certain categories of staff. They will have terms that prevent customers poaching them and if they do there may be financial penalties." The fact that some of Satyam's skills are very marketable, such as its SAP skills base, has put Satyam on red alert for new hires.
Satyam made restoring confidence in its workforce a top priority because its proposition as well as its customers' services depend upon the IT skills of its staff. The global recession mayspare itsome staffing issues, withemployeeshaving little choice but to sit tight.