ITeS and AI: Shaping Tomorrow’s World of Work

SatJ: If there is one industry where AI fits in naturally, I would presume it is the ITES sector. So, one of the things that we want to hear from you is your perspectives about how the recent advancements in the AI landscape is reshaping the ITES industry. And if you can also tell us about some of the recent technological advancements in AI how it has impacted the recruiting industry as a whole based on your experiences.

Swamy: So typically ITES means IT enables the recruitment. So that’s a very old norm. The industry earlier transitioned into business process management. Now, if you ask us, we do more of business process transformation. No more customer’s front middle office, we re-architect, reimagine how the new world order will exist in terms of how the process should be there to suit the end customer, whoever that may be. It can be a finance organization. It can be somebody like you booking a ticket— what kind of experience you want, and then you re-architect the customer journey.

So we typically end up doing more business process transformation right now, rather than enabling an IT process that was the earlier architecture where the industry classified as IT enabled services. So it’s BPT, now – no nomenclature, but the predominant amount of business we are engaging in right now is going through transformation of the front office, middle office and back office completely different from what it was being thought earlier. The earlier model was lift and shift— you do your mess for less. We had labor arbitrage, so we operated out of countries where there was a weaker currency where the fund was happening and there was a stronger currency where revenue was being earned. Now, because of all the influence of AI, all the influence of digital in a broader sense than AI , it’s imperative to do the transformation at the customer end.

So the labor arbitrage as a model will cease to exist at some point of time. So from arbitrage, you need to have capability. And AI will enable that capability in our overall architecture. So that’s how the industry is transforming. And typically, if you see your gut might say that we probably need more technology people. Counter intuitively, we believe AI will reduce the dependence on technology, will allow a normal resource to operate in a high tech environment because there is an intelligence that is enabling the tech and there is a human who is enabling the process. So probably when you go deeper, the impact of it is still not very much understood. The rhetoric is still, it’s going to make a lot of jobs go away. But the coexistence is where probably most companies need to work because AI has been existing for 20 years, right? Generative AI is new. GPT is new. But it still will have some inherent biases. You need a human to intervene and typically, you know, we’ll talk later into the program how a process transfer of a GPT earlier exists behind a human, it probably can be put ahead of a human. Okay. So that your quality of job a human would do is probably be more enhanced than what it was earlier. And the same case can be deployed on the recruitment team. Sourcing is one area where we believe this can do a lot of transformation because a lot of effort goes into sourcing. 

Also in our industry, if you see a resume is not a very big tool. People don’t write resumes. Most resumes are standard. I can speak well or somebody can write that I knew this process well. So the resume industry has also not leaned towards helping a business process transformation person to reflect his capability right in writing. So the application of AI, let’s say for example, if the text mining AI to go through a resume and give you insights is very limited because there’s no content in the resume— now here’s basically where conversational AI can help. And that’s where a generative AI, conversational AI that can talk to multiple people, understand what they do and rewrite that as a resume that can be used later is a snippet of an example where this can transform day-to-day life of a recruiting ecosystem.

SatJ: So how should the recruiter community react to this, because there are two sides that I’ve heard from the recruiter community— one people are very happy with new technology coming in and their adoption is faster. There is another school of thought from the recruitment community, which says, AI is just another technology and it is inherently biased, so it can never replace another human being.

So there is some amount of pushback from the recruitment community. Are you seeing that happen based on your observation and experience? 

Swamy: So naturally it should happen because when you don’t know about something, you probably need to be scared of it, right? The problem in the world overall is nobody applies themselves into how this is really going to impact my life. In a broader sense, you have a machine that’s going to do probably 10X more work and does not eat food, does not eat breakfast, does not eat anything. It’s just going to keep doing repetitive tasks without asking for a hike, without asking for motivation. You know, the whole thing is going to, you know, profess that way. I think the entire industry that we’ve not really, really made an impact on is how do we ensure good quality of resource at an operating level? We’ve never tried to take that as a benchmark. We don’t have measures to explain that we don’t do successful profiling. We do a lot of focus on leadership hiring.

We do a lot of focus on managerial hiring so that you get the good talent, but at an operating level, it’s always been called mass hiring . At scale, the presumption is IQ will get averaged out. Now, here is where a recruiter can make a phenomenal impact. If you are able to take the whole load of transactions she or he is a part of, and they are allowed to assess and select more people who fit their industry rather than selecting anybody who works that way. So I think if you’re able to reposition this as a value add for a recruiter and the problem stems in a different level because look, we don’t have a career path for a recruiter. The problem with the recruiter career path is to become a CHRO.

It can never happen, right? All the recruiters want to transition into HR. In my overall experience, recruitment people struggle in HR because an HR job is a choice architecture job. You probably say more no than yes— it has a different level of complexity, whereas recruitment has only complications. Now you have to make the journey of a recruiter into somebody who probably can select the best talent at a large generic level and that can be hugely impactful for the organization. And that’s where you should leverage that .You should understand how this is going to make the life of the person who is using any tool to be better for him or her, to be more productive, him or her to explore a different frontier, develop their capability. And it’s the job of the leader of the team to position that so until we do that, they are always going to resist.  Suddenly everything has been positioned as a threat that this will take your job. Nobody’s explaining to the person that what will you do if your primary 70 percent of your work which is task oriented goes away?

Does she or he have the capability? What are you doing on capability building? I think it’s a mistake from the leadership side in not engaging him in that thing other than because typically a recruiter question is what’s your productivity for a month? How many resumes have you sourced? How many closures did you do? What’s the offer to join ratio, right? These are tactical questions. We’ve never asked a recruiter that, Hey, tell me how many, you know, out of the hundred guys whom you recruited yesterday, how many of them shined? How many of them were able to create an impact? Why don’t you go choose somebody who has done well and bring that construct into your selection and if every recruiter can increase that by even 20%, that is somebody by chance, hires 10 good guys. And even if they make it 20, right, it’s a 100 percent improvement in his exposure to find the right talent. And that quality of conversation should make her or him better. That repurposing we are not doing. So it will be seen as a threat until you consciously sit with them. Put a program, put a framework and show them the light at the end of the tunnel that this is going to be better for you, they will not allow it to happen. Understood. 

SatJ: You spoke about how business process transformation is impacted using generative AI. Now for our listeners, not everybody would be from, let’s say the technology industry. So without it sounding Greek and Latin to them, can you give a very practical example of how let’s say generative AI is impacting or transforming a business process in very simple terms?

Swamy: Tell you a simple example. All of us travel, right? You typically want to go from Chennai to Mumbai. You want to stay in a hotel. You want to experience four or five things. Typically, let’s say when you call a make my trip, for example, call any of these aggregators, there is the human on the other side who’s helping you. That human will have to search, The human will have to say that, okay, Satish is probably a high net worth individual, would probably want to optimize on the shortest route. And at this age profile, probably he has grown up children. So he might be okay taking an early morning flight. He might want a hotel that’s probably allowed early check in. His probable interest at this profile will be to be in south Bombay, not central Mumbai, right? Now, this intelligence has to be searched by an agent, by us, speaking with you. Okay. Right? Now, typically there is a generative AI that has profiled Satish equivalent in the past and gives and pops up a window. That, okay, somebody who’s of this age profile, probably most probably one, two, three options should fit. Your customer experience will be fantastic because the person on the other side, Swami, who’s your, you know, your, who’s your conversational partner from the aggregator. Say that, hey Mr. Satish, you know what, you’re going to Bombay. The flights were cheaper early in the morning. Since four of you are traveling, it brings down the cost. Use that money to stay in a hotel. Right. And this hotel is on this deal. They allow early check in. Right. You know, so that completely transforms your experience. Right. And you’re going to be wedded to that aggregator for life because somebody solved it for you. Very precisely. Right. To your needs. Imagine the multiplicity of conversation in this arena. It’s going to help the aggregator get next time. You’re not going to call any other person, right? You want to call them, say, because they solve it to a level. That’s the power of generative conversation, right? Because this model is going to run through and it’s self-learning, right? So when that happens, right? It’s going to be a different customer experience. 

And the person on the other side is learning things far better, right? When they learn things far better, they probably can elevate that conversation next time. Because in their mind, they are also learning, right? So I think I’m just trying to make this very simple, but this is how it can impact and extend this to any industry.

SatJ: Now, let’s talk a little bit on the supply side of the equation. No, obviously for all of these new technologies. You need talent. Is the talent transforming at the same pace that the industry needs such people? And if yes, what are some of the trends that you’re observing there? If not, what are companies doing to combat this challenge?

Swamy: So look, if I take specifically AI and generative AI, right, there are going to be two kinds of talent you need. One that is going to build intelligent models to solve for. Right? Now that talent should know how to work on a large language model, build an internal AI engine that is custom suiting your needs. And that probably will come on to the high tech spec then there is a set of people whom you need, who need to co-exist in a generative AI environment. Now, typically two sets of people are useful in our industry at large. A set of people who are, for a lack of better term, from a domain that somebody knows insurance claims into. And we do a claim process. They’ll be able to understand the value chain between a first notification of loss to a settlement of a claim. Right. Now, that talent did not go through a lot of transformation. Okay. But basically at down level, there’ll be operating level people who are going to manage volume and load.

For them, they need a slight change on how to operate on a multi tenanted system. Right now, they probably are looking through a custom ecosystem, now they’ll have an input from LLM. So basically, it’s going to help them become, for a lack of a better term, a super-agent better in our industry. So we have to have access. You have to have domain access, you have to have process access, you have to have technology access. You know, see it like three verticals like a graph. Okay. Now, and you have to assess every job, what do you need more or less? You need more domain, you need less technology, you need more process. You need more process, you need less technology, you need more domain. Once you understand this and probably give a score to every job. You know, for a lack of better term, you say domain process technology score is. 80 out of 100, you know, that means something. So the main important question is the bigger worry in the industry, nobody’s applying themselves to this problem. Look, our industry always runs on a change. We all like to go faster without thinking. Once you sit and apply the problem, probably my guess is it will reduce the technology requirement completely. And probably you can go tell people to be more stronger in their domain because technology you just cannot compete because AI is going to solve the technology problem.

You need more expertise to understand how the future insurance claim process is going to look like. How an end customer will get a claim settled much faster. Okay. Because there is a drone going to take a picture. There is an AI bot that’s going to process the claim. There is an automated repair garage that’s going to repair your car. The ecosystem is completely different from what you did yesterday. So you need more domain to imagine the future process. So I don’t think there is a straightforward answer to this. I think those set of organizations which take it very seriously, do a boring job of detailing them. Understand how it is going to modify every, most recruiters hated or HR hated job description, but creating a job spec and a job description, which are very detailed. And hiring to that , will probably understand what your talent requirement is. The problem is nobody knows what the talent requirement we are hiring. Because when the digital came, the biggest problem, the biggest advantage happened to those set of guys who are doing quality earlier. They call them a digital transformation. They got paid like 50 percent more. It was not a different talent. They transmogrified like Calvin and Hobbes into something different. The same thing should not happen here. You should apply yourself on how it’s going to impact your industry and then go into a bit of detail into that, probably you’ll solve it then.

SatJ: I presume a bulk of your supply today comes from, let’s say, entry level talent, where you pick up people from campuses, train them, make them industry ready, and then start putting them in each of these processes that you are mentioning. So, are there any specific tips you want to give Kids of kids are studying in these campuses? How can they be industry ready over the next two to three years? 

Swamy: So first thing, you know, most of our industry don’t lend themselves to campuses at all. So typically, at least in India you see most of our peak volume of our business happens before the holiday season, and that’s not the supply point for any campus. The supply comes in. May, right? My peak load happens in October, and we are the industry that will carry a huge bench. We need ready talent and our average training to get somebody productive will range anywhere from eight weeks to 16 weeks. Now, what really helps for somebody to be ready for the talent, the first thing is learnability, and the second thing is that if they can get, get themselves exposed to a certain domain and get specialism done, which is far more better than being general. Somebody has to choose because look, the horizontals are very clear. If you’re in finance, you study Bcom, you study Mcom, you do ICWA— that’s very specific to the job. But you can tomorrow choose that you want to have a career in retail finance, you want to have a career with music finance, loyalty management is a completely different accounting, right?

Interlining in airlines is a completely different accounting. Look, the labor markets have not oriented themselves to any specifics. They are still producing mass education by product, which is like a bachelors in commerce. Does it make anything to us? It doesn’t make any difference to us, right? If they are able to repurpose themselves by, and there are a lot of courses that are available and say that if they like airline as an industry, and if they get to know everything about airline in a course, everything about airline, even for information, and they’re able to talk about it and they want to be a part of that industry, that will get them more employable than even education, is what I believe.

Choose a domain where you want to be. Because the world is already getting into a very specialist kind of model. So look, Satish, you and I won’t get jobs now, if we get out, right? Because we are all generalists. Right. We grew up in that era. Even somebody coming into HR should specialize that I want to be a recruiter. And how can I be the best recruiter in the world? I want to be an HR business partner. How can I be the best HR business partner? I want to be a CNB… Even HR will transform. We probably will have the COE demand far higher than general HR. 

SatJ: So are you saying it’s the end of the road for the generalists. It is time for people who are willing to invest, and upgrade or upskill themselves. What is it that companies can do to upskill this huge bunch of people that are out there, already working in various processes? And, and how can they upskill themselves to become industry ready? Right. So typically the world has already now traded off experience for intelligence.

Swamy: So just because you have more experience, it will seem of no value to the world anymore. So you have to get into that because probably somebody with seven years of experience is more capable of handling the variances in the environment than you’re— we are not in that zone. We probably are better off handling complexity. That means this morning there is a different variable. Tomorrow morning there is a different variable. We can handle that. That’s where experience comes in. And experience based jobs are going to be very minimal. Because, because our average working age is going up. Probably we both will retire 20 years from now. That means we’re going to hold some position of relevance for 20 years. It might not pay us that much at what it paid before, but we’ll hold those spaces. And those spaces are not going to be following a mathematical progression of geometry progression, that’s one to one, there is only one CHRO for a 5 billion company. There are no 20 CHROs, right? Now the plethora of jobs are going to happen only in specialists. Compensation will get federated. The company will not have one total reward manager. The company will say my, my total reward manager for my finance team should be more specific to the finance team than somebody who is managing for HR.

You probably need 20 CNB specialists. You probably need 20 leadership hiring specialists. You probably need 20 organization effectiveness guys. That’s where the demand is going to get generated. It’s not going to get generated at leadership level. And they’re going to manage more complications and complexity because the world will become more streamlined. It’s like living in the US versus living in India. Right here you need to manage everything, traffic, plan, and other things. US— you know, it’s 20 minutes, 20 minutes. Right. Now, if that becomes simple, you have to ask you a question. Why should somebody pay you that money? Right, because most of our HR business partners try and do HR business partnering, but they are actually doing customer service.

Now, why do you need somebody to do customer service to arrange for town hall, to give koffee with Karan, kind of a thing, right? We don’t need those profiles anymore. Correct. If you are a generalist, probably in five years be sure that you might not have a job. You need to get very special , you know, with at least one hyper specialization. And that’s very important— it’s my personal view. 

SatJ: One last question before going into the rapid fire round. So how do you see India preparing itself for this— AI challenge or the whole generative AI space? Do you think India is preparing itself again, not necessarily from a demand side or from a supply side, but as a country in your experience?

Swamy: So look if you honestly ask me, most governments will put a lot of constraint on these kinds of changes. Who’s the largest employer in your country? It is the government. What does the government do? They do process management— they move one point to another point. They’re typically supply chain solutions of different orders. You get a passport, you get aadhar, you get a PAN card. These are all processes. Now suddenly, will this take away all the jobs? It might take away all the jobs because it is very intelligent. It is learning at a pace that you and I can’t even imagine. So there’s going to be a lot of regulations on the AI side is what I feel.

To make it more compatible with human existence. And look, our end users are phenomenal. India simply skipped a PC generation— We moved from paper to mobile straight away. We missed a complete generation of PCs, which all the other countries followed. Your FinTech is of a different world order here. You know, your, your payment, digital payment ecosystem is probably the best in the world. And, people are adapted to it. Look, my maid can use Paytm and do transactions. Nobody taught her. She’s never touched the PC in her life. She never went to a green room in the school and operated a computer. She can download an app. She can go to YouTube. She can do everything. These are digitally very native sets of people, and the next generation of people will be far more digital experts. The thing is, I think we’ll be ready for it. We’ll be the largest consumer, how to use it, right? The brick and mortar jobs— probably an AI cannot solve. How many robotic process automation can you bring into a system? We’ll still have a large labor force. It might transform agriculture to give better yield, so farmers can get richer. So economically, if moderated, it’ll be a great story, and I think people are smart enough in native intelligence to adapt for it.

Typically, when an Indian goes into a bathroom he opens a blue tap, red tap. He doesn’t get hot water. He probably will open the blue tab to see whether the hot water is coming, right? That’s native intelligence. Native intelligence is very high in our country, so that will help surpass any challenges. Look, we also saw through the Y2K, we saw through digital, we saw through the subprime, We’ve seen through COVID, right which is again, very, very tough. We came out very well out of COVID. So, and also if you study a lot, India always comes better out of crisis. If it’s slowly seeping in, we might find it difficult. But imagine this gives you better access to health records. This gives you better access to information about people. You know, Aadhar gets more intelligent. It’s only going to help us. Brilliant. 

SatJ: So now let’s quickly jump to the rapid fire questions. Again, short answers and candid responses is what we expect from you Swami. So there’s been a lot of debate on the 70 hour work week and with Gen AI and, and all of that, and the Gen Z population, what is your view on it? 

Swamy: It’s a very obsolete theory to make people work for 70 hours, you just have to measure people on outcome, but if they are on a time and effort basis then somebody cannot work 70 hours. They can’t be productive. Even a masseuse can’t massage you for two hours. Correct. The person is effective for only 30 minutes. So that’s not possible. In the spectrum where you’re expecting outcome, it’s outcome based. So I don’t subscribe to the theory. 

SatJ: We spoke a lot about how AI is going to impact the recruiting industry. So, what are the things that it cannot, where AI cannot make a difference to the recruiting process?

Swamy: I probably think it can never judge a good candidate. It can never build a relationship and enable conversion. It cannot give the warmth as humans can give. 

SatJ: In the near horizon, what are you most excited about and are looking forward to something that AI is capable of doing? 

Swamy: If I’m able to, you know, really imagine a world where, you know, let’s say in my organization, instead of running one enterprise, if I’m able to custom my enterprise, I have like probably we house around, you know, most companies should house around 60 to 65 job families. Can I have policies, procedures for a job family? Why should the finance guy and the HR guy have the same policies? Why should somebody working on a call center and somebody working on analytics should have the same policies and process? The system doesn’t allow it. There’s a constraint of a large ERP that won’t custom allow you to treat one independent organization because you’re making rules that are more administratively easier. Imagine a world where I can tell a finance person that we have completely different policies and ecosystems for you. I know you have to finish your chartered accountancy. I’m okay to give you 50 days leave. I want you to be productive at this level. And I can administer that. That’s a beautiful world. For a CHR, right? Because I don’t like standardization. I think standardization is the stupidest thing we ever ended up doing because it allows economies of scale, right? But hyper personalization, if I can have it, it’s, you know, that’s very exciting.

SatJ: So let me ask you the reverse question. What is it that you dread the most with AI coming in? 

Swamy: Now, I think I dread the most when I find people jumping to conclusions without even experiencing. Look, most of the people who are commenting on chat GPT have not even done a prompt engineering course. You know, and all of them are coming and giving gyaan. They don’t even know what are the odds of possible because they assume that this is what is going to happen. So when I go in depth and conversation with people, I find that they’ve not used ChatGPT even for more than four or five prompts and they’ve concluded that this is what is going to do because it was able to write a poem about their name. 

And that’s the level. So as you know, I dread the most when people are going to use this without applying themselves and probably use it at scale and probably lead to job losses. Probably it will lead to half cooked issues, right, and not getting resolved, and then you’re going to work again on that — that’s my biggest dread with any kind of change in technology, because the people who are having the budgets to implement know very little of it. 

SatJ:. What is your top advice to somebody young who wants to make it big in the industry that you represent, where, you know, business processes are getting transformed. 

Swamy: Look, very important is I still think that anybody who’s young should specialize into something, whatever is the area of choice. And hyper-specialization does not mean that you have to be an engine mechanic for a Ferrari. It can also be at a process level. It can be in the subject matter of your choice. Second thing is that you have to build your relational capability— probably that’s where you can differentiate from a computer. And look, you need not be an extrovert to build relations. You can be an introvert and build good relationships that suit your sensibility.

That’s a very important aspect, very often misunderstood. The third part is they’re going to come to a different workforce with so many different working ecosystems— probably they should solve for their mental health. Very important aspect. Nobody looks into it. Nobody takes it seriously, because most of our countries see that as a taboo, but everybody is going through some form of depression, some form of this and if you’re able to recognize and be more self-aware and you’re probably more included in the workforce. On the other side of the company, we say to understand mental health to be more inclusive, but as an individual also try and understand your state of mental health and try to solve for it yourself because you can solve it better than any company trying to do that for you. And, the fourth thing is to explore yourself to get a diverse experience. When you’re changing jobs, don’t change the job for money— change the job for a different experience, what is it going to expose you to? That probably will make your profile richer and your reasons when you explain when you get older will be more logical. I mean, a combination of these four probably should help do something better than what they’re currently doing. 

An informative episode with plenty of takeaways for recruiters navigating the intersection of recruitment and AI. 

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