When Tata Consulting Services (TCS) first set up shop with a delivery center in Lima, Peru, in 2010, it was breaking new ground, and showing the depth of its commitment to Latin America. TCS, which began its foray into Latin America in 2002, already had centers in Mexico, Uruguay, Argentina, Chile, Brazil, Ecuador and Colombia.
Now, over three years in, the Peru experience – which is representative of TCS’s overall strategy in the region – is paying off with rapid growth that, perhaps inevitably, brings with it sourcing and HR challenges.
“In Latin America we have a group of select customers,” says Novonil Bhattacharya, HR Head for TCS in Latin America. “So, if our customer has operations in Peru, that’s where we go. We started there with one small customer in the banking sector, and we are now seeing additional opportunity in insurance, retail, and telecom. This is happening very quickly.”
Rapid growth in smaller markets can add stresses from a resourcing perspective, and TS is no exception. In September of this year, for example, TCS in Lima was hiring senior Java programmers, functional IT analysts, IT leaders, SOA analysts, and developers. Then in October, there were requisitions out for 13 SAP analysts, along with three .NET programmers. Coming into November the demand profile shifted heavily to .NET and technical support. Overall, in that brief three month period in Lima alone TCS looked to fill about 60 highly-qualified positions in a range of technologies, including architects for IBM’s Websphere Portal 8.
This can be a challenge for a company of TCS’s size, but also fits in well with its philosophy of long-term resource development.
“We don’t just do hiring, we do long term development,” says Bhattacharya. “In Peru, for example, where we set up operations fairly recently, we are working on mentoring and implementing best practices, because there aren’t many big IT operations in the country.”
Even in larger markets like Mexico and Brazil, TCS has established itself as having more of a career focus than hiring for specific jobs.
“We avoid hiring for a given assignment,” says Bhattacharya. “We like to hire early and groom by having people work across projects and, if possible, across foundations. That is the cornerstone of our model. If workers think they have a future with us, can grow with us, then they’ll stick around, and can align with the organization’s larger objectives.”
Learning from Latin America
When growing its operations in Peru TCS has learned from its experiences in other countries in the region; however, country-by-country comparisons must still allow for regional and cultural distinctions.
“There is definitely a lot if uniqueness and nuance between countries,” says Bhattacharya. “Argentina is different from Colombia, and a country like Brazil – which represents almost 50% of Latin America’s economic activity – has a more mature IT industry with a larger qualified workforce.”
A key difference in the region, says Bhattacharya, is that Latin America is less hierarchical. Decisions are more consensus-driven, with more time required to make certain that issues are explained, understood, and accepted by everyone. “In a country like Peru, a program will be about 70% similar to others in the region,” says Bhattacharya. “There will be slight changes to ensure success. We need to take the time to design a program right.”
Bhattacharya says that a hierarchical system may be easier to implement, but it can create problems later on. For TCS in Peru, then, the approach is to build a framework with significant buy-in.
“There has to be a lot of conviction, and communication with the people you are hiring in order to ensure shared beliefs and values,” says Bhattacharya. “We have to sit down with each of the team leaders, then with the learning manager, and get feedback from the ground. Each program will then have individual flavors.”
Peru’s Fast Track
But a non-hierarchical, career-focused approach to HR development can pose challenges in a country like Peru, which has a relatively low level of IT resources in a fast growing economy. The recent news that IBM is opening a data center in the technology campus in upscale La Molina, right next door to TCS’s operations, is good news insofar as it indicates demand growth, but it will also add to resource constraints. The plus for a company like TCS is that once it hires, it tends to keep its employees.
“We have a 98% retention rate,” says Bhattacharya. “Once we hire someone they almost always stick with us.” That high retention rate should serve TCS well in Peru, which the World Bank asserts is “one of the best performing economies in Latin America”, this despite downward growth estimates from Peru’s central bank from 5.5% growth to 5.2% growth, which, though characterized by Reuters as “gloomier”, still makes Peru the envy of many nations. And as Peruvian business grows, so does TCS.
“In Peru our growth is client-driven,” says Bhattacharya. “Customer-centricity is one of our central themes, and when operating in Peru what that also means is that we will work toward the national interest.”
As a region, Latin America is the fastest growing for TCS. The company now has 12,000 employees in Latin America, and is adding more at a good clip: outside of India, Latin America represents more than 50% of the hiring for the global giant.
And Peru will no doubt be an increasingly important part of that story. The country’s finance minister, Luis Miguel Castilla, recently noted that in the past two years foreign direct investment (FDI) has nearly doubled in the Andean nation from US$ 8.2 billion in 2011 to US$ 16 billion in 2013, in large part due to mineral demand from Asia. As well, Fitch Ratings has raised Peru’s credit rating from BBB to BBB+, and the country is putting US$18 million in to a newstart-up accelerator program in the hopes of kick-starting local technology entrepreneurs.