The Hindu Business Line : IT’s all about re-training

Indian enterprises have successfully reengineered operations. A similar effort in academia could be another inflexion point in India’s growth story.

Last week, at the Nasscom Human Resources Summit in New Delhi, Mr Som Mittal, President of the industry body, told media-persons that the top five players in the IT industry could together save $450-500 million a year if the effort they put into retraining fresh recruits can start at the college level. That kind of retraining has helped IT companies get the productivity they need from an increasingly narrower labour pool. Indian industry, in general, has been complaining o f a shortage of employable labour, given the pace of economic growth. So far, the government seems hard-pressed for policy initiatives; to its credit, the organised sector has been doing what it can to keep the wheels humming. In a growing economy, competition for skilled labour is beginning to tell, with engineering graduates in demand, not only from the manufacturing sector but IT companies too. The country is thus witnessing unprecedented competition among businesses fishing for talent in a pond that is increasingly shrinking in size. What is more, the competition is now becoming global. The US economy may be witnessing a slowdown that has yet to hit the trough; retail and manufacturing jobs have been declining for six months successively. But the high-tech industry is still humming, with the government estimating an additional 1.6 million jobs by 2016 and thinning resources, according to US Today. Canada faces such a high-tech labour shortage that an industry association has called for loosening immigration visas.

No prizes for guessing which country will be one of the largest beneficiaries of this shortfall. The sheer number of Indians shopping in a department store in many parts of the US is ample testimony to the phenomenon of Indian talent gaining global acceptance. Not all the IT workers are from the IITs; in fact, many are just engineering graduates from small towns across India, deployed by firms with the kind of retraining that the Nasscom President mentioned. With the commoditisation of IT services, the bar on professional skills has been dramatically lowered, thus expanding opportunities in the back-offices of insurance, finance and service industries, and not just in the Anglo-Saxon world.

With remittances at $27 billion in 2007, the globalisation of the Indian economy is not just boosting balance of payments but also reshaping the domestic job market. Ironically, Nasscom’s lobbying for more H1-B visas will exacerbate the “brain drain” till the point when other countries, notably Vietnam and the Philippines, catch up with similar skills. Domestic wages till then will remain high in the IT-related sectors as more young Indians go West. That should empower an increasing number of employable youth as never before. Indian enterprises had successfully reengineered their operations, in the last decade or so, to exploit global opportunities. A similar effort in the academia could bring about another inflexion point in Indian economy’s growth story.

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