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Foreign firms turn Indian IT industry into employees’ market

Foreign firms turn Indian IT industry into employees’ market
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First Published: Tue, Mar 13 2007. 11 22 AM IST
Updated: Tue, Mar 13 2007. 11 22 AM IST
Hyderabad: An influx of foreign firms into India’s IT services and outsourcing sector is boosting salaries and could soon exhaust the availability of highly-skilled staff, industry sources say.
The booming sector already accounts for 1.5 million jobs, and turnover will reach $48 billion (Rs2,12,340 crore) this year, with companies such as Microsoft, Dell, IBM and Cisco continuing to expand their operations.
Harish Mehta, founding member of lobby group the National Association of Software and Service Companies (NASSCOM), said that employers aiming to hire tens of thousands of workers in the next few years are finding it hard to fill posts.
“India has become an hub for IT companies in the world,” he said. “Current exports will reach $31 billion in 2006-07 and will reach 60 billion by 2012.”
“The bargaining power is on the employees’ side,” he said. According to NASSCOM, IT salaries are increasing 15% a year in India, compared to 3% in the US.
If current growth rates continue, India “will lack 260,000 engineers in 2012 and there will be a shortage of 500,000 suitable candidates,” he said.
European IT services company Capgemini announced that it is on the look-out for 9,000 new staff a year over the next three years. The US-based consulting, technology services and outsourcing firm Accenture is also hunting nearly 10,000 new staff this year alone.
Its Indian operations, mainly centred in southern cities like Hyderabad and Bangalore, range from business process outsourcing to software development.
Snapped up within days of graduation, qualified IT engineers can expect 15% annual pay rises and an average salary of Rs540,000 ($12,300) a year, according to NASSCOM.
This compares to an average per capita income of $800 per year.
India has 300,000 newly qualified engineers entering the job market each year, which is more than the US and Europe put together.
“It’s a huge reservoir of grey matter,” said Pierre-Yves Cros, strategic director for Capgemini.
However, annual demand is forecasted to exceed the number of graduates.
“Given the growth rates, there will be a shortage of highly-skilled people,” he added, but stressed that for the time being at least there is no shortage.
Foreign companies, he said, have to offer training programmes to keep staff. Other firms are already offering health cover, share options and bonuses.
“The most preferred employers will not find difficulty in recruiting people,” said Anil Nileshwar, a strategic director with Microsoft India. “The non-preferred employers will find it hard.”
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First Published: Tue, Mar 13 2007. 11 22 AM IST
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