The Hindu Business Line : ‘IT labour shortage concerns overblown’

The report suggests that Tier II students have “comparable productivity to Tier I engineers and generally do not require significantly more training”.

Anjali Prayag

Bangalore, Nov. 3 Should the Indian IT industry be worrying about talent shortage when it is actually hiring just about 32 per cent of suitable talent emerging out of tech schools every year? Is the market unduly concerned about shortages in IT labour supply? A recent Morgan Stanley Research study on India’s talent supply concludes that “concerns about an IT labour supply shortage in India are overblown.”

Rationalising that the country actually has a surplus (197,000) of qualified but untapped IT talent and an even greater pool of potential employees (7,08,000), and the fact that the country is taking the necessary steps to reach this untapped talent (through hiring and training), the report concludes that labour supply should “comfortably exceed industry requirements for the next 4-5 years.”

The study, conducted on behalf of a leading Indian IT services company, has taken a bottom-up approach to calculate the country’s IT talent by classifying all segments of engineering students, assessing their suitability and the rate of hiring penetration by leading IT firms.

Hiring pattern

According to the report, industry hiring penetration across the country looks like this: nearly 98 per cent of Tier I colleges, about 35 per cent of Tier II colleges, 24 per cent of Tier III tech colleges, 21 per cent of MCA students, 18 per cent of engineering diploma and nine per cent science grads. The surplus is concentrated in Tier II engineering, science and diploma graduate pools. The report suggests that these types of students have “comparable productivity to Tier I engineers and generally do not require significantly more training”.

If companies build their presence in Tier II and III cities and continue to invest in recruiting and training engines, the talent supply should exceed industry requirements for the next 4-5 years, according to the report.

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