The Times: “India is running out of the skilled engineers needed to man its giant software industry, forcing companies to hire staff overseas, especially from China, one of the industry’s pioneers has warned.
Kris Gopalakrishnan, the co-founder and executive chairman of Infosys, said that the outsourcing sector was facing a manpower shortage. India, he said, was not producing enough properly trained engineering graduates to meet expanding global demand for its services.
The country may have a population of more than 1.2 billion people, but the dearth of trained graduates is driving up salaries in its IT industry by 15 per cent a year. That, in turn, is eroding the sub-continent’s global competitiveness and forcing companies such as Infosys, Tata Consulting Services and Wipro to invest in finding foreign workers.
“A lot of the tertiary education in India is done by private colleges and there are significant quality issues there,” Mr Gopalakrishnan said.
India produces about 700,000 engineering graduates every year, but of these only about 25 per cent are sufficiently well trained to be considered for a job in IT, Mr Gopalakrishnan said.
Infosys — whose customers include BP, GlaxoSmithKline and Tesco — was planning to treble its workforce in China from 3,500 to more than 10,000 to help cope with constraints at home, where most of its 155,000 staff work.
“Apart from China, there are not many countries in the world where we can recruit large enough numbers,” Mr Gopalakrishnan added. Infosys, which generated revenues of $7 billion last year, already operates large software development and outsourcing operations in Shanghai, Dalian, Beijing, Hangzhou and Jiaxing. The wages in China are higher than in India but are rising at a more modest pace of about 10 per cent annually.
Infosys has also been expanding its overseas presence in other low-cost countries, such as the Philippines, and has explored opportunities in Egypt.
In expanding fields such as data analytics, there are only about 50,000 engineers in India with the right programming skills. Demand is at least five times that number, according to Heidrick & Struggles, a recruitment company.
India’s software and outsourcing industry employs about three million people directly, an increase of 188,000 from a year ago. It generated $75.8 billion in exports in 2012-13, making it India’s largest single export industry, and is continuing to grow at more than 10 per cent a year even as India’s overall rate of economic growth has nearly halved over the past three years, to just over 5 per cent.
Mr Gopalakrishnan said that as well as hiring overseas, Infosys was trying to improve the quality of education in India by funding teacher training programmes at 350 engineering colleges. The group has also built a private campus in the southern city of Mysore capable of training 14,000 students.
“We will have to continue to invest heavily in education and training,” he said.”
via Outsourcers turn to China to plug India’s skills gap | The Times.
See also: https://chindia-alert.org/economic-factors/information-technology/
Related articles
- India’s Infosys to fire up to 5,000 workers: media (scooprocket.com)
- Wipro More Cautious on 2013 Than TCS and Infosys (beta.fool.com)
- 2013 to be a better year for IT sector: Infosys (rediff.com)
- Infosys Profit Beats Estimates on Bank, Manufacturer Outsourcing – Bloomberg (bloomberg.com)
- Infosys denies report of plans to fire 5,000 underperforming staff (itpro.co.uk)
- More IT jobs in 2013: Infosys (news.in.msn.com)
CHINDIA ALERT: You'll be living in their world, very soon 