Reversal in Talent Wars

Date:   Monday , November 17, 2008

It has been a challenging time. Software professionals rode the IT wave till the end of 2000, as companies offered generous compensation packages. By the turn of the millennium, many became millionaires with newly acquired skills in Internet technology. But the dot-com bust and US tech sector meltdown happened in quick succession, resulting in the layoffs of droves of workers.
Impact on Skill Requirements
Telecom equipment maker Nortel Networks has benched 12,000 employees; chip giant Intel has cut 5,000 jobs; communications major Motorola has laid off 12,000 employees; and PC maker Compaq plans to lay off 4,000 employees in the next two months to reduce structural costs.

This downturn has left many techies in the lurch as the demand for their skills has suddenly slowed. The situation today is that yesterday’s most sought-after skills — HTML, VB scripting and Java — have become obsolete as companies move up the value chain to become “IT-enabled”.

If you look closely at this excruciating activity, you will find that the employees who bit the bullet comprise the first layer, those involved in coding, internetworking, dot-coms and less time-critical work. It’s a “here today, gone tomorrow” state of affairs. Often the first layer gets affected during a downturn.

If anything, prudent IT companies are looking “beyond technical skills” in the search for employees.

Ramesh Naik, who enjoys a generous compensation package in the e-commerce division of Wipro Technologies, says his company is looking for techno-functional skills and not just code writing. So, Naik has now joined the Institute of Telecom Management, Hyderabad, to get domain expertise in telecommunications, and move up to the second layer, which comprises project leaders and project managers. “I was told that HTML and Java programming would never cease, but it now appears that I have to refresh not only my latent skills but also acquire domain knowledge,” he says.

Flip through the employment classifieds of any leading newspaper or magazine and you will find this: “Wanted VC++, VB, Oracle, Java Beans, SQL Server, Oracle Application Server or other object oriented programming skills with domain knowledge in telecommunications, embedded systems or manufacturing. Candidates with Oracle skills should possess domain knowledge of the financial markets and the banking industry.”

Opportunity in Downturn
US companies are still vying for talented professionals and the current trend is to harness multiple skills. Gone are the days when being technically qualified and knowing the latest technology were enough to land in the US.

Ranjan Chak, vice president of Oracle’s India development center, says, “In this downturn, the search is on for persons who have excellent leadership and management skills, apart from sound technical knowledge. Indian IT talent and the global opportunities are here to stay. Currently, keeping the downturn in mind, we look for people who have right skill sets, soft skills and a positive outlook.”

Customized skills that fit the needs of the company is the requirement of the hour. If you can work on Oracle, acquire expertise in financial markets; if you can work on telecommunications projects, dive deep into the telecom industry. These skills extend beyond the realm of programming and managing software applications. “If you are just a programmer and code writer, you are working on the razor’s edge,” says Srini Koppulu, managing director of Microsoft’s India Development Center.

D.V.S. Raju, CEO of Visual Soft Technologies Ltd., says, “As the buzz is IT-enabling today, IT companies may not recruit afresh Internet-trained professionals. It is difficult to say whether these Internet-trained professionals with no domain knowledge will get an entry in today’s competitive world. If the market does not need them, they have to remain unemployed. As the Indian companies are also hit badly due to the US downturn, the absorption rate will be less. On top of that, many projects have been put on hold and clients also demand that billing rates be brought down.”

B. Rama Raju, managing director of Satyam Computers Services Ltd., says, “For our insurance vertical unit, we pick the best persons who have sound knowledge about the insurance sector. The preference is given to people with Internet skills combined with domain knowledge of the insurance sector. As these people know the industry well, they can interact with the customers, collaborate with project managers with ease. This will also help us negotiate with the clients better and deliver quality services.” So programmers and even project leaders are forced to take part-time courses toward an MBA or CFA (chartered financial analyst) or CA (chartered accountant) to move up to the next rank in the organization. And the institutes that offer courses for these techies are replete.

In India, renowned training institutes like NIIT and Aptech plan to introduce programs leading to a postgraduate diploma in applied IT (PGDAIT). This program, based on aptitude filters and/or traditional skillsets, qualifies candidates for specific industries, both in theoretical and practical hands-on areas, over the final months. They round out the program with industry-specific project experience and the relevant certification. On completion of the program, merit candidates are absorbed into projects by the IT companies.

E-learning and e-training are gaining momentum as high-potential allied growth areas. The Indian National Association of Computer Trainers (NACT) estimates the potential market to be $66.66 million.

Abhirama Krishna, regional head of NIIT, says, “We plan to introduce a diploma in applied IT program within six months.”

Despite the slowdown, starting salaries are on the higher side in a pure-play IT company. Opportunities for these people in different industries will keep growing. Entry-level salaries are in the range of $36,000-$60,000 and can go up to more than $120,000 in a year’s time. Compensation packages include incentives and other productivity-based components.

But how would a professional’s life be different in a traditional environment compared to a pure-play technology company? “It is different to a large extent. You will get a handsome pay package and a place in the industry. You are the most sought-after and your views matter every time,” DVS Raju said.

Because companies like to invest a lot of time and money on finding the right people, recruitment advertising will shoot from $105 million in 1998 to $5 billion by 2003 in the US alone, according to Forrester Research. Microsoft has 300 staffers keeping track of the best talent across the industry. NIIT spends more time getting to know the attitude of potential employees than analyzing formal qualifications. And in this industry, skills become obsolete. So companies are investing a lot of time and money in training and upgrading the technical knowledge of their staffs.