Wipro was founded in 1945 by M. H. Hasham Premji Maharashtra India. Initially, Wipro produced sunflower Oil and soaps. Hasham Premji died in 1966, and was succeeded by his son Azim Premji. Azim Premji is current chairman of Wipro Limited. Venture: Under Azim Premji’s leadership Wipro is now third largest IT Service Company in India. In 1970s and 1980s Wipro’s started venturing in IT services and business consulting. This is a good example of corporate entrepreneurship. Wipro used parts from multinational companies like Cisco, Canon, HP, Epson and stated selling homemade personal computers in 1975.
In 1980, Wipro started providing customize software to its customers. Wipro started providing out sourcing services in 1992. Soon after that Wipro started proving IT services, business consulting, managing services, software development, web development etc. Wipro show whopping growth in coming years and its revenue was $6. 8 billion last year. Losing talented employees is one of the biggest problem for Indian IT service companies like Wipro. Wipro have experience tremendous growth in last ten year. Growth is result of Wipro’s business model where they hire low cost resources and kept growing from overseas work.
However IT companies such as Wipro is facing some major challenges with their current model. As Indian economy is growing, living conditions are improving and with that cheap talented labor is disappearing. Since the whole IT industry is booming in India, barging power of the talented employees is too high due to skills and knowledge they have to offer. Another problem with Wipro is that its talented workers are staring their own business. As the investment environment in India is changing more and more entrepreneurs are able to receive investment to start their own venture.
To retain its talented employees Wipro’s HR has implemented employee attrition and customer satisfaction programs last year. Wipro’s solution to the problem is pay hike which will destroy its core business model of hiring cheap labor. Wipro’s attrition rate in 2006 was 15. 9% (third quarter). CEO Premji said that situation is under control and they will be able to bring rate down by increasing the pay. However attrition rate in 2011 second quarter was at 22%. These data clearly shows that Wipro’s strategies are not working to solve attrition problems.
I think Wipro’s approach to use compensation model to solve their talent management problem will not work on long run. Wipro will have to do more than just increasing salary. Wipro should create a enthusiastic environment for its workers role, work and organization. Wipro should invest more on personal and professional development of their employees. Wipro should initiate the programs to enhance the bonding of employee to their organization by social activities, continuous learning programs, employee-friendly policies etc.