Business Today Net Special

Nasscom '01

By Ashutosh Sinha

If you thought companies in the IT sector were on a roll, here is some food for thought.

The average stay of an employee in a company is 1.5-2 years.
The attrition rate in most IT companies is between 20 and 40 per cent.
Over 50 per cent of the employees have spent less than a year in their jobs.
The availability of people with over three years of experience is low.

The NASSCOM 2001 show in Mumbai The Indian IT industry is currently facing an acute shortage of talented professionals. With an estimated 2.2 million IT pros required if the Nasscom-McKinsey stated target of 87 billion by 2008 to be achieved, the situation could not get more grim.

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Points out Vipul Tuli, Principal, McKinsey: "Over the next five years, more than 500,000 people will be required to fuel the IT sector growth. But where are the quality people?"

Companies in the infotech industry are already feeling the tech crunch that is rapidly changing the environs of the industry. The dearth of talent has forced IT companies to extend their search to other industries.

The present global scenario estimates a shortage of 1.6 million IT professionals in the US (the largest software market in the world); 500,000 in Europe and one million in Japan. With the demand for software pros increasing everyday and countries looking at India for support, the task of finding the right pro seems to get more and more difficult. Says Hema Ravichandar, Senior Vice-President (HR), Infosys: "Today hiring has become a complex courtship ritual."

Worries for the Indian IT industry which is already reeling under an acute shortage of manpower doesn't stop here. After enjoying leadership in the global software arena for few years now, the threat of losing this status is coming from across the northern borders. China is desperately trying to boost up its domestic infotech industry. With challenge coming primarily in areas like embedded software, telecom applications, and other application development areas, the question that is bothering the Indian IT industry is "will China overtake India?".

The answer is there with the experts. Said Rohit Bhagat, Vice-President, Boston Consulting Group: "India needs to identify and concentrate on its core strengths and try to develop specific areas in the field rather than look at what China is doing." However, keeping a hawk's eye on the IT developments in China would be essential to ensure that India could carve out a niche which is higher on the value chain to maintain its competitive advantage.

The Department of Telecom Secretary, Shyamal Ghosh, spoke about the need to liberalise the telecom sector on the second day of the summit. With China's cellular telephone population over 70 million, compared to India's three million, the fear lurking in the industry corridors is that the stunted growth in the telecom sector will in turn slow down the software sector.

With a tech-squeeze and sudden Chinese IT boom, time is not looking favourably at the Indian IT industry. But with no immediate solution to these problems, the Indian IT industry, it seems, still has a long way to go.

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