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Foreign Firms Turn Indian IT Sector into Employees' Market - ASHARQ AL-AWSAT English Archive
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HYDERABAD, India (AFP) -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 this year reach 48 billion dollars, 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), says employers aiming to hire tens of thousands of workers in the next few years are already 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 dollars in 2006/2007 and will reach 60 billion by 2012.”

“The bargaining power is on the employees’ side,” he told AFP. According to NASSCOM, IT salaries are increasing 15 percent a year in India, compared to three percent in the United States.

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 last week that it was 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.

“The bargaining power is on the students’ side, who can often choose between at least four jobs,” said Krithi Ramamritham, dean of computer science and engineering at the Indian Institute of Technology in Mumbai.

Snapped up within days of graduation, qualified IT engineers can expect 15 percent annual pay rises and an average salary of 540,000 rupees (12,300 dollars) a year, according to NASSCOM.

This compares to an average per capita income of 800 dollars per year.

India has 300,000 newly qualified engineers entering the job market each year — more than the United States and Europe put together.

“It’s a huge reservoir of grey matter,” said Pierre-Yves Cros, strategic director for Capgemini.

However, annual demand is forecast to far 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 was 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 difficult to recruit people,” said Anil Nileshwar, a strategic director with Microsoft India. “The non-preferred employers will find it hard.”

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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