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June 6, 2000
BUDGET 2000 |
The Rediff Business Special/George IypeBrain drain-hit Indian IT firms yearn for techies
"The headhunt is on because the warning is in the air. Qualified techies are migrating to the West for fat pay paychecks and attractive lifestyles. If the trend continues, India will face a terrible shortage of software engineers in the next three years," warns Naresh Goyal, managing director of SoftTech Consultants, a Bangalore-based recruitment agency for software professionals. "What Indian companies like Wipro and Infosys tell through their advertisements is that the young techies need not go to the West for a job. They can provide attractive jobs and pay packages in India itself," Goyal adds. Consultants like Goyal say it was not India but the United States, which spotted the huge bank of software talent in India years ago. Since then, India has remained a key recruiting area for US technology firms. According to the US Bureau of Labour Statistics, American IT companies need to fill some 269,000 jobs, and that talent shortfall will increase as the number of technology jobs expands from 5 million today to 6 million in 2008. There has been a mad scramble for Indian technology brains. So much so that immigrant Indians today are the biggest IT group in the US. Of the 115,000 H-1B visas issued to foreign technology workers in 1999 alone, nearly half went to Indians as American firms have been appointing Indian techies with starting yearly salaries of $ 60,000, which is nearly 10 times more than they would get at home. But the IT brain drain from India is landing the mushrooming IT industry into a crisis. According to a study conducted by the National Association of Software and Service Companies, or NASSCOM, the Indian software industry has projected a demand for 1,40,000 knowledge workers for 2000-2001. But India's vast educational system produces only 73,000 to 85,000 IT graduates a year. NASSCOM, which did the study in collaboration with McKinsey, says that the human resources requirements of the Indian software industry are such that even if the current manpower pool is increased tenfold in the next five years, the Indian industry will absorb this pool.
Take, for instance, Bangalore -- India's own Silicon Valley. The country's IT capital is gripped with a terrible shortage of software professionals that companies are unable to sign contracts and failing to complete projects. Nearly 5,000 software enterprises are operating from Bangalore with more than 1,500 having some kind of foreign collaboration. "There is indeed a huge shortage of skilled software engineers. In fact, the present IT manpower is just adequate to fulfill 30 per cent of our requirements," says K M Uthappa, a recruitment manager at Tata Consultancy Services, or TCS. He says that the manpower shortage is extremely acute in the telecommunications software sector. While TCS has been looking for some 300 qualified engineers for developing telecommunications software, it has managed to recruit just 15 techies. "It is becoming very difficult to get the right people and, therefore, IT companies are facing a serious problem," Uthappa added. Experts point out that if the paucity of right software professionals continues, it will affect the growth prospects of many companies in India. "More than that, it will block projects and choke contracts," says Manish Srinath, who is the managing partner at Intech Solutions, a networking company in Bangalore. Intech Solutions lost a couple of high-profile clients last year because the company, with 28 software engineers, did not have more hands to deal with the increasing customer load. "The problem is that the Indian software industry has grown very fast. But our technology schools and engineering colleges are yet to offer the required number of qualified people we need," Srinath said. But Suresh Tyagi, a software consultant in Bangalore, says that it is not India alone that faces a shortage of software manpower. "Shortage of IT professionals is a global phenomenon. But it has hit India hard for two reasons. First, the IT boom in the country has been exponential in the last few years. Second, the IT brain drain from India is also the largest," he points out. Though the six Indian Institutes of Technology in India produce the most highly sought-after graduates, most of them migrate to the US to take up prime jobs in the technology companies there, he says. "However, the Indian tech companies have become attractive propositions as many firms here have started offering stock options and attractive salaries to the IT professionals," Tyagi says. Every day a new country lures Indian software talent away and the paucity of software professionals continues to intensify for the Indian IT industry. Germany has already passed a law that allows the country to induct 20,000 non-European Union techies, most of whom will be from India. German Foreign Minister Joschka Fischer himself was in Bangalore last month to woo Indian software programmers. Japan, Italy, Singapore, Spain and the Gulf countries are also on a headhunt mission to India.
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Bees travel for miles searching for the right nectar. But the real sweetness of their efforts is realised only at home."
In fact, there is a huge mismatch between the supply and demand for the IT whiz kids that big-ticket infotech companies like Wipro, Infosys and Satyam are hunting for across the length and width of the country. Attractive salaries and 
The NASSCOM-McKinsey study goes on to add that the software job market will remain tight and difficult as India will require 2.2 million IT workers by 2008.