‘Our focus is more on value creation than volume’

Days of replacing global talent with Indians for cost arbitrage have reached a threshold: Cap gemini chief

After years of rapid growth in its offshore employee base in India, French information technology services and consulting major Capgemini has decided to apply the brakes on hiring and return to “cruising speed”, much in line with the broader industry trend.

Paul Hermelin, chairman and CEO of the Capgemini Group, says the days of replacing global talent with Indian talent for cost arbitrage had reached a threshold. “We have progressively replaced a lot of French, Dutch and Americans with Indians. In India, we were growing 20 per cent every year, faster than our global growth. Today we have reached the level of Indian sourcing that we needed and now in terms of Indian sourcing… we are at what I would call the cruising speed,” said Hermelin.

Capgemini is one of the largest global IT employers in India after IBM and Accenture, with over 100,000 employees in the country, which is almost 50 per cent of its global employee base. The acquisition of iGate in 2015 alone had added almost 25,000 employees to the company’s workforce in the country.

The company also added 1,600 Indian employees through their acquisition of digital engagement platform Liquid Hub this year.

Hermelin said while most of these acquisitions were part of the company’s strategy to acquire the scale, future acquisitions would be more skill-based, which is “extremely important in a digital technology-centric industry”. “We have moved from just volume, which has created room for everybody to value growth. We intend to be a winner in the value race, and are ready to invest in employees so that they also emerge as winners in the value race,” he said.

Since last year, the company has quadrupled its internal reskilling efforts to cater to the large-scale requirement of new technologybased skills. The Capgemini CEO, however, added that

the company won’t altogether move away from older technology skill-sets, which, he said, were important for improving productivity.

Unlike its peers, Hermelin said, Capgemini did not see itself as a pure play digital or core IT services company and would rather like to continue to cater to its legacy clients while at the same time increasing the share of digital revenues. Digital accounts for 42 per cent of Capgemini’s overall revenues.

“The world of digital requires multiple iterations of development cycle. And we are successful here because we are growing digital in India very rapidly.” Capgemini is building large digital use cases in India and is witnessing large-scale development rather than doing experimental pilots in the country.

Talking about the opportunities in the country, Hermelin said the nature of digital projects had evolved from digital marketing to digital manufacturing through IoT, digital supply chain and engineering/manufacturing, where India already had a strong presence.

The company is pushing this innovation focus through 12 innovation centres across the globe, one of which is in Mumbai and another is coming up in Hyderabad. With these centres, the company intends to boost its engagement with academia, start-ups as well as clients.

“Today, we have reached the level of Indian sourcing we needed, and now in terms of Indian sourcing… we are at what I would call the cruising speed” PAUL HERMELIN,

Chairman & CEO, Capgemini Group