Top 5 IT firms spend $438 mn on training

Top 5 IT firms spend $438 mn on training

Bangalore: In a sign that the fresh output from India’s engineering colleges isn’t quite what they are looking for, the country’s top five software companies will together spend close to $438 million (Rs1,721 crore) this financial year in training the around 100,000 engineers they would have hired in the same period.

In the case of most companies, up to 80% of the hires are made at the entry level, and up to 80% of the training budget is spent on them.

“It is a telling indictment of our education system that companies have to spend a couple of thousand crores in training our engineers who have already undergone four years of training at graduate level," says S. Sadagopan, founder director, International Institute of Information Technology, Bangalore.

According to the All India Council for Technical Education (AICTE), the country produces a little over 400,000 engineers every year.

A huge chunk of them end up in India’s rapidly growing IT industry. This year (2007-08), Infosys Technologies Ltd, Wipro Ltd, Tata Consultancy Services Ltd (TCS), HCL Technologies Ltd and Satyam Computer Services Ltd will together spend $438 million, according to estimates provided by the firms.

“There is a huge disconnect in terms of what they are taught and what the industry wants. Weak soft skills, particularly communication and articulation skills, and lack of industry knowledge are a major drawback to our pool of engineers," says Mukund Menon, global head, talent acquisition, Satyam Computer Services.

The training bill of India’s IT companies is set to increase with the industry already facing a talent shortage.

According to industry lobby group Nasscom, India’s IT and back-office industries employ around 1.6 million people now and will face a shortage of 500,000 workers by 2010.

“People speak of unemployment but there is an employability issue as most people do not have the skills required by the industry," says Gautam Sinha, CEO of TVA Infotech, a leading recruitment and placement consultancy.

Most companies will have to spend more on training at a time when their profit margins are under pressure because of a rising rupee and a slowdown in the US economy that could crimp the IT spends of large customers.

The primary market for most Indian software services companies is the US.

Hard and soft skills

At India’s largest software services company by revenues, TCS, all engineering trainees (people hired straight off campus) undergo a 52-day initial learning programme, which is a combination of technical learning, soft skills development and orientation to company processes and practices.

And all TCS employees undergo a mandatory 14 days of training annually under a continuous learning programme.

Infosys puts all its entry-level engineers through a 16-week-long boot camp at its Mysore campus.

The emphasis is largely on technical training. Later, employees are taken through specific training to equip them with the skills required by the units to which they are assigned.

At HCL Technologies, employees go through a mix of competency-based and project-based training.

“The focus of the initiative is to stimulate employee development across levels and functions," said Anand Pillai, vice-president and global head, talent transformation and intrapreneurship development, HCL Technologies.

Getting schools to learn

India’s engineering schools have largely failed to recognize the demands of industry, say experts.

“Our education system is not market-responsive," said Kiran Karnik, president, Nasscom. He added that “drastic reform" was required in the educational system for schools and colleges to understand “industry needs".

“Why is it necessary to train people who have been to vocational colleges? There is a gap between what industry needs and what universities teach. The whole training system taxes the IT industry," Karnik said.

Karnik says that more universities should go the way of the Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs), brooking no interference from the University Grants Commission (UGC), a Union government body that funds at least part of their budget.

IITs and IIMs are autonomous institutes and are financed by the Union government. They set their own curricula and their own methods of evaluation.

The gap between what industry wants and what schools deliver can also be addressed through partnerships between companies and educational institutions, say some experts.

“We have suggested to the government to invite corporate houses into investing in universities. They can adopt a university or two and run them through their affiliates. As the corporate houses know the industry demands, they know what is expected from a future employee," said Sadagopan.

According to Nasscom, India’s software and back-office firms earned revenues of $39.6 billion in 2006-07, growing 30.7% over the previous year. It expects revenues to cross $50 billion this year.