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Demand is the quantity of a good that consumers are not only willing to purchase, but also have the capacity to buy at the given price,” said the famous economist Adam Smith. If one were to go with Smith's definition, it is difficult to think that the IT services industry could face challenges in building its workforce.

IT services companies do have the capacity to pay technology professionals handsomely. However, it is not just the question of demand. This industry hires the best from premium technology and management institutes in India.  In fact, it has even started hiring from abroad. Infosys plans to recruit 300 college graduates from universities in the US this year and 25 graduates from the UK in 2007 to create a diversified, global workforce.  In 2005-06, Infosys doubled the percentage of non-Indian employees, hiring from more than 25 different nationalities. “When you hire the best and the brightest, the learning curve is steep. But if the IT industry hires the top layer what happens to the rest of the Indian industry? Wages go up, other industries suffer,” says TV Mohandas Pai, head of Human Resources, Infosys. 

Hiring Blues
Despite apparent advantages, the reality is that the IT services industry is facing several manpower-related issues that need to be tackled quickly. Recruitment is of two kinds: hiring from campuses and lateral hires. There are problems in both. With campus hires, the main issue is that the industry wants more quality personnel. In the case of lateral hires, the issues are more numerous. 

Increasing the funnel or scaling the supply side is the main challenge when it comes to campus hires. This is not an issue for the IT services industry alone. It is applicable to India Inc. Says Pai, “Currently, our economy is at $800 bn, and it will double to $1.6 tn in the next 10 years. In 10 years we have to double the existing number of professionals that we have in India.” 

For that to happen we will have to double the capacity of our educational system in the next five years. Achieving scale in the education system is the key. The main bottlenecks are inadequate faculty, too much governmental control, low capacity and outdated course structures. To overcome these bottlenecks, it will take more than the efforts of the government. In order to create a vibrant education system the private sector will have to make larger investments, as Prime Minister Manmohan Singh said recently. 

It is a serious challenge for India Inc, which has to be addressed at state and national levels. “I am worried at the complacency all around that India will grow at 7.5-8% for the next decade and everything is going great. Everything is not going great. The human resource side is the biggest challenge, which can derail growth unless we address it,” says Pai.

With the demand for well-trained manpower being so high, IT services companies are almost demanding “finished products” of universities, which is an unreasonable demand considering the bottlenecks in the education system. Few Indian companies invest in training except for the billion-dollar companies such as Infosys, Satyam, TCS, and Wipro, who have world-class training facilities that are almost factory-like. Some MNCs have strong campus programs while others could do better on this front.

“One of the biggest challenges is finding the right talent and then enabling them very fast,” says Hema Ravichander, HR consultant. The argument in favor of training programs is that freshers are willing to put in more hours-they have the urge to prove themselves.

The Attrition Hurdle

We will have to double the capacity of our educational system in the next five years

Perhaps the biggest challenge of lateral hiring is attrition. While this is not a new issue, the resultant cost increases are beginning to hurt. 

“Surely tenure has some meaning. The mercenary attitude shown by tech professionals has led to low stability of the workforce and progressively shorter tenures,” says Tarun Hukku, chief recruitment officer, Microland.  This is making sustainable capability development a difficult task. Companies end up focusing only on the few who are expected to have longer tenures.

Is there an erosion in our value systems? Says Hukku, “Youngsters are interested in knowledge, but are a lot more focused on money. Their focus is on the next job and not on building a career. This has led to employees gaining functional knowledge rather than in-depth knowledge.” The only silver lining is that the high attrition rates in the metros have led IT service companies to expand into other cities. 

Communication and Service Skills
Technology skills apart, IT service companies are facing issues of IT professionals being less than ideally equipped when it comes to other areas as well. India may boast of a large English-speaking workforce, but the irony is that communication skills are an issue. “Unlike the manufacturing industry where only your technical skills mattered, in the IT services industry your communication skills also matter,” says Dr Pallab Bandyopadhyay, chief people officer, Scandent Solutions. 

As the technology professional often deals directly with clients, he needs to develop various soft-kills to do the job well and to ensure repeat business from the customer. Another area where technology professionals often fall short is in service orientation. “Traditionally, we are not service oriented as a nation. We have grown up seeing and accepting mediocre service in public utilities and even the private sector. We bring this attitude to the job,” says Bandyopadhyay. The ability in these professionals to understand and respond to the business requirements of the customer needs to be enhanced.

Combating Prejudices
In Indian society, most parents want their children to become doctors, engineers, lawyers or IT professionals. But, do students study what they have an aptitude for? Do they love the work they do? Or do they merely follow the hierarchy desired by society?

This hierarchy is applicable in the IT services industry as well. Testing and configuration management are lower in the hierarchy than embedded software and product development. The system software professional has more airs around him than an application software developer. 

“Indian IT companies are operating on a global scale and we need a work force capable of delivering, both, for legacy systems and for leading edge technologies but people think that current technologies are more lucrative,” comments Hukku.

If Indians are not able to deliver, someone else will. Other countries like Vietnam and Philippines will take away chunks of business because they will become world class in certain areas that have not appealed to Indians. Can we afford that if India wants to maintain the high growth targets that it has set for itself? Leaning on a phrase used by Gurcharan Das, the management consultant, Bandyopadhyay asks, “Does the Indian technology professional think of becoming a world-class tester rather than a third-class developer?”

Need for Action
The large number of recruitments by the IT services industry in the last three years has led to a situation of shortage in the midst of plenty. While there are plenty of employees at the junior level there is a serious shortage at the middle management level. There is need for more leaders. “How to make good managers of great individual contributors is a major challenge facing the industry,” says Ravichander.

Another issue facing smaller companies is the risk of creating a one-dimensional work force. Says Hukku, “The need for higher levels of expertise and vertical industry knowledge has led to less time being given for development initiatives and this has made internal mobility more difficult.”

Certain other deplorable practices of faking or padding résumés have led to lowered credibility for the industry. Aware of the need to act, Nasscom has initiated the national software registry program, which is being viewed as a necessary step by the industry. It remains to be seen whether it can be implemented smoothly. 

Though the IT services industry is clearly in a state of growth, the challenges being experienced in human resources need to be tackled efficiently lest they inhibit this foreseen growth. 

E Abraham Mathew, CEO, CyberMedia Dice
mail@dqindia.com

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