Harder than Harvard
A fast-growing Indian outsourcing company admits only 1 percent of applicants. Here's how it trains 15,000 recruits a year.
By Julie Schlosser, FORTUNE writer-reporter

NEW YORK (FORTUNE Magazine) - It's just before nine on an overcast morning, and Yesha Bhatt, a 21-year-old engineer from Mumbai, joins a river of black hair flowing from her dormitory to the main classroom building on campus. Jake Hu, a 21- year-old from Jiangxi province in China, slips into the procession after hurriedly downing a dosa. Others -- 4,000 "freshers," as they're called -- talk on their mobile phones and gossip with friends as they make their way to class.

This could be any college campus in America, complete with a Domino's Pizza, a store that sells school T-shirts, and a library that's open 24/7. But it's not. We're in Mysore, India, and this is Infosys U., formally known as the Global Education Center, one of the world's largest corporate training facilities.

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Infosys at a glance:
ï History: Founded in Pune in 1981 by Narayana Murthy and six others. Develops business-process software and provides outsourcing services for Cisco, Nordstrom, Microsoft, and others.
ï Revenue: $1.6 billion (fiscal 2005), up 50% over the previous year.
ï Employees: 49,422 (as of Jan. 1), up 34% over 2004.

Infosys Technologies, India's second-largest software service firm, is growing fast -- revenues increased 7,951 percent over the past decade, to $1.6 billion in 2005 -- and last year it expanded its workforce by about 15,000. That's an average of 40 new employees a day, and it is here, to Mysore, that many of them come to learn the Infosys Way.

These are India's chosen. Securing a position at Infosys is more competitive than gaining admission to Harvard. Last year the company had more than 1.3 million applicants for full-time positions and hired only 1 percent of them. (Harvard College, by comparison, accepted 9 percent of applicants.) While many global firms are preoccupied with downsizing, pension cutting, and benefit slashing, Infosys and several of its Indian competitors face a rare and welcome challenge: boundless growth.

But recruiting, hiring, and training at a pace that can satisfy this insatiable appetite for talent requires more than simply showing new employees to their desks.

"There aren't many companies growing like this," says Infosys CEO Nandan Nilekani, who helped found the company 25 years ago. "Companies haven't been investing enough in people. Rather than train them, they let them go. Our people are our capital. The more we invest in them, the more they can be effective."

Inside the steel gates at Mysore, an old silk town about 90 miles south of Bangalore where Infosys has its headquarters, few expenses have been spared in the effort to impress the several hundred freshers who arrive each week for the 14-week training programs. There's a high-tech bowling alley, a hair salon, an infinity pool studded with palm trees, one of the largest gyms in India, and a geodesic dome that houses three movie theaters and looks as though it just rolled in from Epcot Center.

Indeed, the $120 million Infosys center, which opened last year, is an odd combination of Disney World, Club Med, and a modern American university. It's enough to make you forget the poverty outside and believe you're in a First World fairy tale.

Boot camp for smart people

But this is not summer camp. Before even being considered for a job at Infosys, each applicant must pass an exam made up of math equations and logic puzzles that many fail. After the interview, after the job offer, comes the real test: eight hours a day at Mysore studying lines of Java code, attending team-building workshops, and learning to differentiate the do's of global workplace etiquette from the don'ts. In order to graduate, every fresher has to pass two three-hour comprehensive exams.

Sometimes the students break down, says Ravindra Muthya, head of education and research. But only 1 percent to 2 percent drop out. "For us, this is very expensive," he says. "We can't lose them."

Which raises the question: In a country like India, where daily newspapers run math equations for entertainment and the talent pool of engineers is said to be as expansive as the Ganges River, why must Infosys spend $5,000 per fresher for training?

"There is still an abyss between the academy and the industry," says Abhishek Shandilya, 23, a mechanical engineer who graduated from college in Bangalore last year.

Infosys executives agree, saying that India's higher-education system -- often unpredictable and in some disciplines outdated -- is preventing its new recruits from being placed immediately on client projects.

"I do not mean that we do not learn things in colleges," says Shandilya, "but the knowledge we attain there is very raw."

Many freshers, like Shandilya, come with little or no practical work experience. Infosys doesn't mind. In fact, the company prefers hiring a mechanical engineer who lacks computer skills but shows a high aptitude for "learnability" (Infosys-speak for being a quick study) over a computer scientist who can't solve problems beyond his technical training.

In many ways, Infosys treats its new recruits as if they're still college students. On the Mysore campus, strict rules are in force. Boys are not allowed in the girls' dorms (and vice versa). There's no alcohol, anywhere, anytime. But you won't hear many complaints. For most, the opportunity to work for Infosys is a dream come true.

Murthy's dream

Bhatt remembers hearing about Infosys and its founder, Narayana Murthy, while growing up in Mumbai. Her father, a banker, talked about how Murthy was the "most down-to-earth person."

Yet on Bhatt's first day of class at Mysore, Murthy was anything but down-to-earth: There was his image, 12 feet tall, beaming down from two screens in the Mahatma Gandhi Auditorium, welcoming all the freshers -- or Infoscions, as they're also called.

In 1981, when Murthy hired his first recruits, there were few rules, and training happened on the job. The job, in those days, meant working out of a makeshift office in Murthy's home. Today the virtual and impersonal welcome doesn't bother freshers like Bhatt or Shandilya, who says he came away inspired. With scale comes anonymity, a fact not lost on the eager employee.

"I'm one of nine Abhisheks in my row," he jokes over a traditional Indian meal at one of the food courts.

As Infosys has scaled up its workforce, it has relied more on technology for training purposes. "Productivity improvement comes from converting synchronous transactions to asynchronous transactions," explains Murthy. His example: switching from phone calls (synchronous) to e-mail (asynchronous).

There's an online database of Infosys case studies for employees who need help with client requests. And because of the ever-increasing class size in Mysore, the company is turning to computers to do much of the teaching.

Nagendra Setty's Java class in the Gordon Moore Room -- one of 58 high-tech classrooms on campus -- is a case in point. Setty, an applications designer, clips on a microphone and lectures for three hours about J2EE, a Java platform. Then he steps away from the lectern, allowing the 100 students to work independently, building their own applications on their own computer monitors for the rest of the day.

While most of the training focuses on technical skills, freshers spend a lot of time working on softer skills such as team building, comportment, and improving interpersonal communications. In the Jeff Bezos Room one morning, Bhatt listened intently as the instructor discussed the importance of body language and told the class to practice smiling in front of a mirror.

There are plenty of smiles down the hall in the Harley-Davidson Room, where four students in Sudha Prasad's corporate etiquette class perform a skit about trying to get back onto campus after drinking too many cocktails at a local bar and missing curfew.

"You are all brand ambassadors," Prasad tells her class as she runs through several what-if scenarios.

It is ironic that Murthy and Nilekani -- two low-key and modest executives -- created a global branding powerhouse in a country that favors the subtle over the brazen. But at Infosys U., the corporate logo is rarely out of sight. It adorns sugar packets, coffee mugs, polo shirts, and umbrellas. Each of the seven dormitory buildings is in the shape of one of the letters in "Infosys" -- an effect visible only from the air.

An expanding brand

The brand now attracts attention far beyond India's borders. The company has offices in 18 countries, including China. Jake Hu, the fresher from Jiangxi, who eats dosas with chopsticks, is one of 100 Chinese undergraduates selected by the company and government officials in Beijing to spend seven months training with Infosys. The exchange, an attempt to deepen the relationship between the two countries, is also a way for Infosys to find and train talent while it ramps up its operations in China.

"Infosys China is developing fast and provides a lot of opportunities," says Hu during a break from a programming class. He will return to China this spring and expects to graduate with a software engineering degree in July.

But he and several compatriots aren't sure the salaries Infosys pays in China can compete with those of other global firms. His dream job, he says, is to work in marketing for Procter & Gamble (Research). The Chinese students aren't the only ones talking about pay. Outside the Gandhi Auditorium, two Indian freshers are planning their escape. "The pay is lousy," one girl says. (Salaries start at about $5,000 a year.)

While the two say they are thrilled to be at Infosys and think the training is the best around, they also know its market value and plan to find a higher-paying job or apply for an MBA after a year with the company.

Paying for talent could end up being the industry's -- and perhaps the company's -- Achilles' heel. The competition for well-trained engineers drove salaries in India up 15 percent last year. And job hopping has become commonplace.

"Every evening, Infosys capital walks out the door," says Muthya, the education director. "Our job is to get them to come back."

For now, Infosys has no choice but to continue scaling up. Blueprints for expanding the Mysore campus have been completed, and by 2007 it will have the capacity to train 10,000 employees at a time. That's more than double the number it can accommodate today.

With a million-plus applicants a year and a relatively low attrition rate, Infosys appears fit for the coming talent battle. The Mysore training center may or may not help win that fight, but one thing is certain. These 4,000 young engineers didn't come here to laze around the pool or burn calories on the company's treadmills. After a week at Infosys U., Bhatt has yet to make it to the gym.

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Julie Schlosser was recently a fellow with the International Reporting Project at The Johns Hopkins University School of Advanced International Studies. Send feedback to jschlosser@fortunemail.com. Top of page

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