Tags
career growth, expertise, hikes, IT services, layoffs, organization size, product development, salary, skills enhancement, talent management, work, work-life balance
For those of you who are not familiar with the term ‘IT services company,’ it refers to those companies that provide human resources and IT/BPO services to other organizations, including product development companies. I have worked for both types of organizations and this article covers my experiences and learning over the years I have spent in both of these environments.
So, what are the differences?
Parameter | IT Services | Product Development |
---|---|---|
Organization Size | Human resources bring in the revenue from billing clients, so IT service companies are always in need of people. You will notice that established IT services companies have a strength of more than 100,000 people. | Human resources eat into the OPEX budget. Product companies will hire only if there is a need and a value-add. The usual size can vary between 5000 and 100,000. |
Skills Enhancement | Employees of IT services companies get to work across different verticals, different technologies, and different tools. Obviously, the learning is high and employees get a lot more exposure to different kinds of industries. | Employees of product development companies learn more about the products they are working on, the technologies supporting these products, and the tools needed to support these products. They generally do not get exposure to other verticals unless they are a part of the product implementation team. |
Talent Management | IT services companies give high importance to talent management, and you will notice that the HR talent management team is very active in providing employees opportunities to learn, collaborate, and grow. | Product development companies usually do not have a strong HR talent management team and it is not actively involved in team-building exercises or people-building exercises. Of course, employees are trained on technical and soft skills, but the investment in training is not emphasized as much as it is IT services companies. |
Work-life Balance | The work-life balance in IT services companies is not consistent and at some levels, it does not exist. The expectations on employees are very high, which can cause stress. There is usually no option to work from home, unless you are in management. | Product development companies usually provide better opportunities for work-life balance. Most product development companies allow employees to work from home, with of course the manager’s approval. |
Career Growth | Career progression in IT services companies is generally faster because of the size of the organization and the rate at which these companies grow. | Career progression in product development companies is slower in comparison to IT services companies. They are smaller companies and the rate of expansion is, for the most part, slower. |
Salary & Hikes | The joining salary at IT services companies is usually lower than market standards. However, the yearly hikes and bonuses, if applicable, are pretty good. | The joining salary at product development companies are equal to or higher than market standards. However, the yearly hike percentages are usually in single-digits. Bonuses, if applicable, are lower than the bonuses offered at IT services companies. |
Layoffs | Layoffs in IT services companies occur mainly because of poor performance. Usually the bottom 5% of employees, who are the least performers, are affected. Even so, there is usually a 3-month performance improvement period where the employee is given a chance to improve. | Layoffs in product development companies can happen due to various reasons: mergers and acquisitions, OPEX concerns, or because of the poor performance of both the company and the employees. Usually, layoffs in product development companies are swift and surgical. |
Expertise | Usually employees of an IT services company do not become experts in any one technology or product, unless they have been associated with a client or a project for a long time. | Employees of a product development company gain expertise and knowledge of the product over a period of time. If they leverage their knowledge, they can even become specialists in their chosen field. |
Working for each type of organization has its advantages and disadvantages. From my own experience, I can say that if you want to learn a lot and you are not that experienced, it is probably better to join an IT services company, because the exposure you get is tremendous. If you already have around five to seven years of experience under your belt, you may want to try getting into a product development company so that you can gain more expertise in the field you choose.