“It's not easy to get the right professional. The talent pool in India isn't large enough. Many of the CVs we receive are simply junk. It's difficult to have to fish through some 2000-odd resumes. India's job market has gotten worse ever since multinational companies have begun to expand into India in search of talent,” says Meenakshi, who heads the HR department at Mahindra Consulting.
Meenakshi's sentiments cannot be discounted. Finding the right professionals is becoming increasingly difficult for Indian software companies, despite the fact that over 120,000 trained IT professionals are added to India's talent pool each year (compared to 25,000 professionals each year in the U.S.).
Interestingly, the Indian IT services companies blame multinational firms for stealing away a large chunk of Indian talent.
Going by the figures, multinational companies have grown considerably in volume and increased their contribution from 16 percent to 29 percent. IBM IGSI has about 3,100 employees, followed by Cognizant (2,712), Oracle India (2,000), Hughes (1,500), Hewlett-Packard (I) Software (1,489), Digital Globalsoft (1,480), Syntel (1,464), Covansys (1,449) and PwC (1,200), according to a recent Nasscom survey conducted in March 2002. Interestingly, despite announcements from most large MNCs of significant layoffs in their international development centers, the Indian work force has doubled in capacity.
For instance, two years ago, SAP's Bangalore center accounted for a mere one percent of the total development spend. Today, this center accounts for over eight percent of the development spend and is projected to grow to 15 per cent in the next two years. The company has recently announced plans to invest 23 million Euros in India. Microsoft plans to take 300 people on board by next year and plans to invest $500 million in a couple of years. Oracle similarly plans to triple its staff strength in about 12 months and is opening a new center in Hyderabad. Moreover, GE Intel, Cadence, and Texas Instruments are hiring at an accelerated pace.
Intel is already making its presence felt as Craig Barrett, during his recent visit to Bangalore, announced that the company would double its current workforce in India. EDS hopes to expand its Indian operations five to eight times over the next three years, with plans to recruit more than 5,000 people in the near future. Cap-Gemini, which has a development center in Mumbai, plans to hike up its manpower strength from less than a thousand to over 5,000 in three years. The UK-based Xansa has announced that it will recruit 10,000 professionals in a 5-year period.
But why are MNCs looking to India? Mahidhar Reddy, HR manager of the 1700-employee company Digital India, explains, “There is a good demand for legacy skills. People with four or more years of offshore experience have the chance to outscore others. It goes without saying that candidates who returned or were laid-off are still the hot bet for MNCs. It's not just the pay package that is attracting the Indian talent pool to the MNCs, but there are numerous other social factors that contribute to it.”
The growth of MNCs in India is also expected to bring a much-needed change into the work culture of the domestic software industry. “Multinational companies actually inculcate a consulting culture into the Indian professionals. For software product development, the staff needs a different capability and discipline, which Indian software professionals could learn from the MNCs,” says N. Lakshmi Narayanan, President and COO of Cognizant.
Indian companies' woes
Madhu Poomalil, senior vice president of the 750-employee Intelligroup Asia Pvt Ltd, concedes that there are not many openings for the fresh college graduate-especially after the shakeout in the IT sector. The small and medium software firms have begun to tighten their belts by cutting their staff strength. At this point, MNCs reign supreme.
Each year, Intelligroup, which is predominately in the eSAP space, on average hires 360 consultants with backgrounds in ERP, Oracle, and PeopleSoft. "But we end up getting people who are not exposed to the complete life cycle implementation of onsite projects. Significant time and money are spent on training these new recruits with limited exposure to onsite projects," says Poomalil.
Ashok Verma, an ERP consultant who claims to have experience in onsite projects, asks, “If there is so much concern for Indian companies and MNCs to get better employees, then why is there a freeze in new recruitments?” Vikram Verma, from job placement firm MaFoi, explains, “High bench is a primary reason for the depressed job market and the withdrawal of offers to freshers. In the past year, companies have focused on generating revenue through improving workforce utilization and deployment.”
There is demand for IT professionals with three or more years of experience, possessing domain expertise in niche technology verticals. For example, Wipro is on the lookout for project managers, functional experts in the area of package implementation and process consultants. So, freshers, hold on, just a little while longer!
Meenakshi says, “For software organizations, hiring will be based on projects. We hire professionals with six or more years of experience. Compared to last year, the recruitment business has improved, but companies are hiring professionals with six or more years of experience. There is absolutely no demand at the junior levels because the benched resource in most companies has not been deployed. Also, the attrition levels at the junior level have fallen drastically as companies are no longer generous to job-hoppers.”
Mahindra Consulting, which is involved in eSAP, networking, and information security, hires about 100 SAP professionals every year. “In addition, there is an acute shortage of professionals with PeopleSoft, SAP, and ERP skills. Again, the person should be multi-skilled with a sound knowledge of Java, too,” explains Meenakshi. The average salary of an SAP logistics consultant in an Indian software company is around Rs. 5 to 6 lakh a year, while the MNCs pay close to Rs. 9 to 10 lakh.
Hiring model flaw
Infosys Technologies added 75 employees in the fiscal quarter ending 31 March 2002, as compared to 109 employees in the prior quarter. “During the boom period, Indian IT companies confident of bagging onsite U.S. projects fought bitter talent wars and lured techies with astronomical pay packages, often without an adequate assessment of technical skills or domain expertise. That 35 percent of Infosys employees were on the bench is an indication of the industry's hiring policy,” says Uday Phatak, an industry analyst.
Besides three years of work experience, companies look for professionals with niche skills. Infosys, Wipro, and Satyam are looking for candidates with skills in the automotive electronics, avionics, and medical electronics sectors. Moreover, the market for embedded chip design and applications is rapidly growing. While Indian companies are becoming increasingly quality-conscious, freshers continue to be badly hit.
Global IT giants, who are either setting up independent ODCs, or expanding existing facilities seem to revive the Indian job market. Today, MNCs have ceased to view India as a low-cost support destination. Motorola has moved its entire product development department to India; even part of its product management and specifications development has been shifted. Adobe has moved eight percent of its worldwide development resources into India with plans to increase this figure to 20 percent over the next two years.
But multinationals like Intel, Texas Instruments, and National Semiconductors are in an aggressive hiring mode-astonishingly enough, finding the right talent. With more than 100 companies involved in semiconductor design in Bangalore, the demand for these skills is bound to remain steady. Network security, telecom, data warehousing, and wireless are other areas in which many HR managers project a steady demand for professionals. It seems that while Indian companies are struggling to find the right professionals for their projects, MNCs are having the last laugh.
