The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

War of Talent: A paradoxical situation

Prithvi Shergill
Monday, July 31, 2006
Prithvi Shergill
Just a few weeks ago I heard the CEO of one of the FMCG majors in India comment and was bemused to hear him talk about the war for talent that is seizing his industry. He spoke about how companies were adopting all possible tricks in the book to retain their employees and recruit top talent from competitors. I was concerned, as clearly the challenge of building human capital that the IT industry has been facing for some years has now become a wider cross-industry debate needing attention from the highest office in an enterprise.

Talent management is now the single most important issue right now bothering the CEOs and Business Leads across sectors. In a rapidly growing economy where the domestic market is looking upbeat, exports have been rising, outsourcing deals are coming in at a brisk pace and companies across the spectrum are making investments and planning their respective expansions, finding talent that can work and accomplish results within this business context has become the most worrisome issue for corporate India. In fact, in a recent McKinsey survey, business executives in India ranked scarcity of quality talent as the biggest constraint for growth, much higher than infrastructure and regulatory issues.

It is ironical that India, the world’s second most populous country, with 375,000 engineers and close to a million graduates and 28 million unemployed workers, is now fretting over hiring and talent scarcity.
The biggest crunch, it is believed, is being felt in the rapidly growing IT industry. The reasons are understandable. Almost all IT companies in India (be it Indian companies or multinationals that have set up operations here) have significant hiring plans and will get only larger in future. IT industry is expected to hire 300,000 workers this year.

What is accentuating the war for talent is that this sizzling growth is coming at a time when the IT industry is facing competition for talent from other sectors of the Indian economy in an intense manner. For very long, with other sectors of the economy sluggish, IT companies remained the most preferred sector for fresh graduates across campuses. Take for example the two emerging and growing sectors like automobile and retail, which till about three years ago weren’t on the growth radar. Society of Automobile Manufacturers estimates that the industry will invest $6 billion and create over 6 million direct and indirect jobs in the next two-three years. Retail sector, similarly, is expected to invest $18 billion in the next five years creating 2.5 million jobs. With other sectors of the economy growing, globalizing and recruiting aggressively, the competition for key talent has only become more intense.

There are other reasons why IT industry is facing an accelerating war for talent. For very long, they were among the best paymasters, offering the best work environment and opportunities to work globally for young graduates. With staid and old world manufacturing sector focusing on downsizing, most services sectors - still at a nascent stage - there was little competition. That has changed. Other sectors of the economy including automobile, consumer durables, and telecom are willing to pay and provide a world-class environment even as they hire in big numbers. Yet, IT industry continues to be one of the biggest recruiters - out of the 370,000 engineers passing out of colleges this year, it is believed that that around 200,000 will be employable and IT industry would be hiring close to 140,000.

Share on Twitter
Share on LinkedIn
Share on facebook