Developers in short supply in India
As hiring picks up in Bangalore, the city's software professionals are again acquiring the spoiled-brat image they had in the late 1990s, when the dot-com boom increased staff requirements at Indian outsourcing companies.
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Demand is highest for software professionals with two to four years of experience, and many change jobs frequently for a hike in salary of over 40%, according to Bijay Sahoo, vice-president for talent engagement and development with Wipro, India's third largest software outsourcing company. Wipro added 3,300 software developers in the third quarter alone.
Software development companies in other Indian cities are also facing a shortage of suitable engineers. Kenexa Technologies, the Hyderabad subsidiary of Kenexa, a provider of recruiting services and software, recently had 500 applications to fill six positions, according to Raghuveer Sakuru, managing director of the subsidiary.
The quality of applicants was poor and there were a large number of fake resumes, according to Sakuru. Not only must companies like Kenexa offer raises of as much as 70% to new hires over their current salaries, but retaining staff means giving salary increases of at least 10% at each six-month review.
Large scale hiring of staff by multinationals such as Accenture and IBM for their Indian software operations created a shortage of experienced engineers, particularly in Bangalore, which has emerged as India's IT hub. The engineer shortage is expected to get worse as local outsourcing companies increase hiring to meet an outsourced services surge.
Software developers are often willing to wait until they get a job with a salary that matches their expectations, said Gautam Sinha, chief executive officer of TVA Infotech, a recruitment firm. "They know that they don't have to wait very long," he added.
As Bangalore's infrastructure deteriorates under the weight of the growing technology industry, software professionals are also getting choosy about work locations. "If there is more traffic on the roads and it takes them more time to reach the office, you may find some resignations because of that," Sahoo said.
Companies prefer to hire experienced engineers from other top businesses, which contributes to the Indian staff crunch, according to Sinha. "Companies do campus recruitments as well, but they need people who are productive fast, and it takes at least six months for a campus recruit to become productive," he said.
As the demand for staff picks up up, the country's educational institutions are not turning out a sufficient supply of IT graduates. To sustain year-on-year growth of 30% in software and services revenues, the Indian industry will require about 110,000 new out-of-college engineers each year, against the current availability of about 80,000 a year, according to Sinha.
Despite the staffing cost increases, India remains a cost-effective location to set up operations, according to Kenexa's Sakuru. "Today we are able to get a 60% to 70% cost saving," he said. "If this trend of increasing salaries continues, we will be cutting into these percentages, but there will still be savings."
To attract and retain staff, Indian companies like Wipro are trying new approaches that focus on intangible benefits such as career growth and friendlier work environments.
If companies once recruited only the best engineers from the top schools, they now recognise that avoiding the staff crisis means finding other measures for a candidate's capability. Employers recognise that certain jobs, in application maintenance, for example, do not require such highly qualified engineers.
"We are already seeing some kind of self correction by the market," Sinha said. "Companies are now also looking at those holding Bachelor of Science degrees and diploma holders, and are stepping up in-house training."
John Ribeiro writes for IDG News Service