The danger level of ‘talent-all-eroded’ is approaching at a very high pace in the IT and ITES sector. How will India meet the demand of employable IT professionals? A special report by LOVEJEET ALEXANDER.
- “We will add 8000 workers in India this year, taking our total count in the country to 35,000. That will surpass 30,000 workers employed in Accenture’s US operations.”
William Green, CEO – Accenture
- “Number of technology jobs to reach 1.7 million in India by year 2010.”
The blurred picture
India has an inexhaustible supply of top-flight engineers and IT specialists. Today, it is a known fact for one and all that the country is a day and night running factory of Software Professionals. Holding a whopping 44 per cent share of global offshore outsourcing market for software and back-office services, enjoying confidence of 95 countries outsourcing their work to her and with more than 82 per cent of American companies grading her as their first choice, India has undoubtedly become a near synonym to outsourcing.
Playing on with the number game and in fact mastering it —
- India boasts of having the biggest pool of IT brains with 1,20,000 professionals added to the industry every year.
- Almost 2.5 million graduates pass out of Indian colleges every year.
- India churns out more than 4,00,000 engineers per year.
Facts, at odds with figures
Make an Indian IT company talk and statements claiming that India has achieved this position in outsourcing due to their brilliance and strategic thinking will soon be heard. You’ll no more remember that the only reason they got their foot in the door was because they were brought in as low cost labour to fix the Y2K coding.
The scene behind the startling figures has a different story to reveal. And a peep into reality that showcases the looming shortage of IT talent over the Indian horizon would blow the country’s gilt-edged reputation apart.
Still keeping with the pace and reputation, researchers say that the software industry will create more than a million jobs in the next couple of years because of outsourcing. However, these jobs will demand specialists, rather than generalists. That’s where the lustre starts tainting.
It’s not in the quantity but certainly lies in the quality.
“There are 2.5 million graduates every year in India” NASSCOM President Kiran Karnik observes, “but employable pool in this is very, very small…’
Companies are able to select only 8 to 9 out of 100 people applying for skilled technical posts. The most talked about news came recently from Google itself. This had a serious heartburn while trying to sign up enough talented engineers for its high tech research centre in Bangalore. Surprising, the much-talked about Indian brain couldn’t impress Google that has for long been looking for ‘real’ brains in the country.
Dirty little secret
NASSCOM’s recent study reveals that only one out of four engineering graduates from India had technical skills, knowledge of international business practices, fluency in English language and proper networking abilities to be employable.
Supply down Demand up
- According to a study by research company iSuppli, demand for VSLI & EDA Engineers combined in year 2004-2005 was 4,400. However, the supply was 1,340 – a thwarting 70 per cent shortfall.
- “There are several IT/ITES companies who are not getting employable manpower in the state thereby making it difficult for them to expand. The IT/ITES built-up space will grow to 2 crore square feet in the next two years creating 2 lakh more IT jobs in the state. We need to build this talent base for them. There is a visible decline in skilled manpower.”
– Debashish Das, State IT Minister (West Bengal)
In a statement on February 01, 2007 (Kolkata)
This rising gap between supply and demand of skilled worker for IT outsourcing companies in turn has resulted into exponential rise in the salary of existing staff. The attrition rate in the field has gone high by 12 to 15 per cent. If the trend continues, the pay of Indian programmers will nearly double by 2010.
‘Cost Benefits’ termed to be the spine of India’s value proposition in outsourcing industry is in itself under threat, leading to an undeniable threat to India’s growth in the future.
If salaries get too high, many if not most, of the global companies will reduce their commitment or leave India. They may discover Bangladesh, Vietnam, Pakistan, Sri Lanka, Russia or China. All of these demand much lesser wages than Bangalore. In this case, what will stop a Global Company from moving to another country?
India Vs China
While India is slowly and gradually reaching its limit of saturation in supplying technical and sagacious brains to the global companies, China has reasons enough to grab the market. India undoubtedly has a massive lead on China in the software off-shoring game. However, behind the scenes, the Chinese have already planted seeds that will eventually make them major players in the industry.
May be this is one of the reasons why Indian companies keep on grabbing outsourcing contracts so as to avoid the buyers and their jobs going away to other companies (read Countries). Though as compared to 25 per cent of engineers in India having basic skills for offshore IT jobs, only 10 per cent each of total engineering pass-outs from China and Russia bear them. The labour cost advantage may start playing a crucial role and take shape of a turning point in times to come.
With so many jobs flowing in the country, Indian outsourcing companies are compromising with the quality of workers being recruited. And if the scene remains the same for long, the software off-shoring market may eventually go off the Indian shore.
So is India ‘ready’ to take that…? This is a question that must form an immediate concern for economists and educationists across the country. To maintain its market of amity and goodwill, India presently needs to provide quality rather than quantity of workers to the software haunts of the world. The next step should be of looking at ways of churning out more prudent and astute technical workers for meeting with the increasing demand for IT talents.