Mumbai: Software services firm Infosys Technologies Ltd expects a skilled manpower shortage in the next two to three years to be one of the biggest challenges for the industry and for the Indian economy.
Infosys, India's second-largest software services exporter, employs about 52,700 people and plans to hire 25,000 this year, former chief financial officer and newly appointed head of human resources, T V Mohandas Pai, said on Tuesday.
Pai told reporters the information technology and IT services sector was expected to hire 1 million people over the next three years, a level of demand which would prove a drain on skilled resources for other areas of the economy.
"The limiting factor for India's growth will be availability of trained people and not infrastructure," he said. "It is the biggest challenge for the sector."
Company executives and analysts have repeatedly said India's poor roads, congested ports and power shortages threaten to stunt its economic growth, currently about 8 per cent.
But Pai saw a "looming war for talent" as a bigger constraint adding: "The IT sector's share in the talent pool is growing."
Some 370,000 students would graduate from engineering colleges in India this year.
Out of this number, 200,000 were employable, of which 140,000 would be hired by the IT sector. That number would rise to 170,000 next year, leaving very little for other industries.
India's booming IT, back office processing and software services industry is valued at about $36 billion, according to industry research, and employs just over one million people.
But turnover in staff is high compared to other parts of the economy, with the industry losing employees at an average rate of 15 per cent a year.
Infosys's annual attrition rate is 11.2 per cent while wage costs in offshore services are growing at 12 to 15 per cent a year.
Pai estimated IT firms would spend $2.6 billion in training over the next three years. It took $5,000 and 12 to 16 weeks to train a software professional and $600 to train an employee in business process outsourcing.
The company has spent $110 million in training this year and another 5 billion will be spent in the next 12 to 15 months, Pai said. "Complexities of business are expanding with more growth in services.
We have to have a global workforce and more people in order to sustain a 30 per cent growth (in the industry)." The National Association for Software and Service Companies said in a review of 2005 only 3.6 per cent of engineers produced every year were of international quality but many more could reach a higher standard with better education infrastructure.
Pai said Infosys was working with the government and other authorities to improve college level training and had launched a programme to work with engineering colleges, but that much more needed to be done to improve education in schools and colleges.
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