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BUSINESS,
INFOTECH
And Now The Bad
News
Projects
on hold, irate clients and frayed
nerves. For India's IT firms, the flight of talent to foreign shores is
proving to be an unusually bumpy ride on the infobahn.
By
Robin Abreu
Dilip Agashe
was ecstatic. Two months to go before graduation he had received the job
offer of a lifetime -- a chance to work with IBM in the US. Big Blue was
dangling a starting salary of $720,000 (Rs 3 crore a year) a year, car,
a house in the suburbs, two months stay in the Bahamas and the all-important
$20,000 worth of IBM stock as ESOP. Is the 25-year-old undergrad from
Nagpur born lucky or is he just a chosen one? Nothing of that sort. He
is in fact studying computer engineering at IIT Mumbai and will soon join
the ranks of those highly prized technos whose services are needed around
the world -- countries as far as Germany, Italy and Japan and by people
who would confuse his name with Agape. Naturally, that did not bother
him one bit.
It's geeks
like Agashe who are making the "Global Indian" a brand name.
Says Dilip Ranjekar, HRD manager, Wipro: "All of a sudden the Indian
it professional has become more popular than a cricketer. He can solve
any problem and is considered a demigod.''
So where's
the problem? It's the country actually. While the pros never had it so
good, the flight of it talent to foreign shores is causing Indian companies
to move into shutdown mode. As foreigners zip in to recruit from India,
the nation's own rapidly growing it companies are looking at a disturbingly
depleted tech landscape. An acute shortage of qualified engineers and
programmers is leading to a huge mismatch between supply and demand. Big-ticket
it outfits like Wipro, Infosys and Satyam are scouring the country's colleges
and tech labs. Net result: hr departments are head-scratching, hair-pulling
and making frantic calls to placement firms.
You could
call it a bad year for India's leading software company -- Tata Consultancy
Services (TCS). The company's profits have touched an all-time high of
Rs 2,300 crore (Rs 1,690 crore last year), exports have risen to Rs 1,300
crore and it expanded its operations from 25 countries to 30. That's a
bad year? Well, there is one hitch. TCS does not have sufficient manpower
to meet the growing demand from its clients. It's experiencing a shortfall
of over 1,500 it personnel -- something that's without a precedent at
TCS. Says Vinay Aggarawal, the company's chief financial officer: "It's
a strange feeling, we do not have the people to complete our projects.
They are leaving for work abroad.''
TCS is not
the only company that is discovering the rigours of e-combat. Listen to
Nandan Nilekani, managing director and chief operating officer of the
Rs 285-crore Infosys: "We are facing a 10 per cent attrition in staff
and that is because they are being lured abroad.'' This is something out
of the ordinary as last year IITians would have given their right arm
to join Infosys. But today the story is different. It's a problem affecting
the Rs 1,867-crore Wipro too, which in a desperate bid to recruit staff
had to run advertisements in newspapers.
So, is the
it brain drain snowballing into a crisis? A joint study by the National
Association of Software and Service Companies (NASSCOM) and McKinsey projects
a demand for 1.4 lakh knowledge workers in 2000-2001. But India produces
only 73,000-85,000 it graduates a year. The study says the human resources
requirements of the Indian it industry are such that even if the current
manpower pool increases 10-fold in the next five years, it will be absorbed
locally. Besides, it projects a total requirement of 22 lakh it workers
by 2008.
The NASSCOM-McKinsey
study highlights Bangalore. India's Silicon Plateau is gripped by such
a serious shortage of it pros that companies are failing to complete projects
and are unable to sign contracts. Says a TCS executive: "There is
indeed a huge shortage of skilled software engineers. In fact, the present
it manpower is just adequate for 30 per cent of our needs.'' He says the
shortage is acute in the telecom software sector. While TCS has been looking
for some 300 engineers for developing telecom software, it has managed
to recruit just 15. "It is becoming very difficult to get the right
people," he adds.
Back-of-the-envelope
calculations suggest that with around 5,000 software enterprises in the
city, the shortfall is in the range of 1,500 to 2,000 topnotch it pros.
Naresh Goyal, managing director of SofTech Consultants, a Bangalore-based
recruitment agency, warns: "Qualified technology professionals are
migrating to the West for fat paychecks and attractive lifestyles. If
the trend continues, India will face a serious shortage in the next three
years.''
Goyal's
view is backed by the US Bureau of Labour Statistics. According to the
bureau, American it companies need to fill some 2.7 lakh jobs and that
shortfall will increase -- the number of technology jobs is slated to
rise from 50 lakh today to 60 lakh in 2008. This has caused a mad scramble
for Indian it brains. So much that immigrant Indians today are the biggest
it group in the US. NASSCOM says that of the 1.15 lakh H1B visas issued
to foreign technology workers in 1999, nearly half went to Indians.
Explaining
the phenomenon, George Zacharias, CEO, Satyam Infoway, says, "Indian
companies are international in outlook, management style and culture and
offer a challenging environment with a great deal of freedom. This is
reflected in the employee.''
Bangalore-based
Intech is an example of a company that was bested in the global it sweepstakes.
Intech lost a couple of high-profile clients last year because the software
solutions company, with 28 engineers on board, did not have more hands
to deal with the increasing customer load. Intech needed 60 it professionals
but it added zilch to its staff. "The problem is the Indian software
industry has grown very fast. Our schools and colleges are yet to offer
the required number of qualified people," says Manish Srinath, a
managing partner.
The exodus
continues. Every day a new country lures Indian talent away. For the high-flying
Indian it industry, perhaps it's time for a little humility. N.R. Narayana
Murthy, chairman and CEO of Infosys, puts things in the right perspective:
"If the paucity of software professionals continues, it will affect
the prospects of many firms in India.''
The industry
which isn't buckling under attacks from hackers or geeks is now threatened
by a human resource implosion. Companies are trying all sorts of manoeuvres
to check this flight -- juicy ESOPS, option to work from home, creches
for children when both parents are working, free education for employees'
children and even gyms, saunas and pools in the office. But like Infy
-- which made a spectacular debut on Nasdaq two years ago -- India's software
sultans are discovering that it is a hard drive on the infobahn.
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