Thinking phoren: Why is Flipkart hiring from Harvard and Stanford?

Diversity is good when it comes to acquiring talent. Flipkart, India’s biggest ecommerce site outside the areas of ticketing and travel, says it is heading for Harvard, Stanford and Wharton for talent from the next placements season. However, the details provided by the company on why it is heading to the US of A to acquire talent are skimpy, making it difficult to fathom why this is such a good or bright idea. For a $1 billion revenue company that derives almost all its income from India (even after the recent acquisition of Myntra, the fashion e-tailer), it is not clear what the Harvards and Stanfords can deliver that an IIM or IIT cannot. The reasoning offered by Flipkart’s human resources people is bare. The Economic Times quotes Mekin Maheswari, chief people officer, as saying this: “Flipkart has become a brand with visibility and we want to absorb global talent. The awareness has increased and so has inbound requests for internships and hiring from international universities.” [caption id=“attachment_1556367” align=“alignleft” width=“380”]  Flipkart requires Indian insight, so why shop abroad?[/caption] While there is no gainsaying the difference in the quality of education and learning environment provided by our IITs/IIMs and the Ivy League institutions, there is also the fact that it is far easier to get into a Harvard than an IIM Ahmedabad. In other words, the level of talent getting into India’s top engineering and management institutions may be far higher than the ones getting into American ones, though the end-product may be different. On the other hand, there is also the obvious benefit of recruiting from institutions that are bang in the middle of an internet and ecommerce economy, with their own unique insights into customer behaviour that comes from being part of that culture. India, which is still on the ground floor of the ecommerce experience, is hardly the place to find ecommerce talent – beyond the coding and engineering side of things. On the other side of the cost-benefit ledger, an Indian engineer or MBA would have better insights into how the Indian consumer mindset works. Then, there is the cost difference. Average salaries even at a top IIM would be in the range of 12-18 lakh – a midpoint of, say, Rs 15-16 lakh per annum, excluding some perks. A Harvard passout would cost four times as much. Are the benefits from having A Harvard alumnus on your payroll four times higher than the difference in the costs? One may point out that McKinsey and Accenture also recruit from the IIMs and pay the same global salaries – they don’t do it for costs. They are either seeing talent where we don’t see it, or they simply like the global diversity it brings to their business. But Flipkart is hardly global. If you are an Infosys or TCS, whose customers are all Americans or Europeans, it makes huge sense to hire locally in those parts. Any customer-facing business needs to have executives who are from that culture. Indians may make for better geeks and nerds, but the customer is not buying only cheap coding skills. He is buying into your story, and this story may often best be told by people who share the customer’s culture and ethnicity. It’s about trust. But this is not the case with Flipkart, which is all about becoming No 1 in India. It may need foreign talent in specific areas, but it needs Indian insight. If the idea is to recruit specific kinds of talent abroad that are relevant to ecommerce, then costs are not material. The key to understanding why a Flipkart would recruit from the Ivy League and Stanford lies in finding out what is the value it seeks from this investment. Is it because most of its fund-providers are from private equity players there, and their comfort comes from having those kinds of people at the helm? Or is it because having a Harvard or Wharton grad on your employee list adds to your company’s CV? Is it all about having a trophy employee on the payroll, the way some Indian employers recruit MBAs from the IIMs just to tell outsiders they have the best, even if they cannot always use them well? Or is Flipkart feeling too Indian, now that its main competition will come from the likes of Amazon? The jury will be out on Flipkart’s recruitment plans till we know what it wants from its Ivy Leaguers. We can defer judgment till then.