Talent shortage? “What talent shortage?” asks Pratik Kumar, vice-president (HR), Wipro , reacting to the crib about talent shortage in India.

He points out that over the past 4-5 years, India’s big three IT companies — Tata Consultancy Services of Bombay, and Bangalore’s Wipro, and Infosys Technologies — have increased their annual hiring from just a few thousand a to 20,000-30,000 while still rejecting almost 95 per cent of job applicants. Even in the business process outsourcing (BPO) industry, where 40-50 per cent employees move jobs every year, headcounts rose from 100,000 to 450,000 in 2006. They also managed to hold average wage increases at about 20-25 per cent — about the same as the previous year.

Still, Kumar admits, IT majors maintain large training centres to prepare even their rarefied recruits for doing the actual jobs — Wipro has 12 centres all over India that together can train 6,000 people at any given time. More than talent shortage, employers face education shortage, he says. “Even an Einstein coming out of an Indian college will require at least some training to make money for his employer,” he quips.

Delhi-based National Association of Software and Service Companies, or Nasscom, harps that the talent shortage might curtail India’s potential to double its export of IT and BPO services to Rs 2,64,000 crore in 2010.

A Nasscom-McKinsey report in 2005, ‘Extending India’s Leadership of the Global IT and BPO Industries’, painted a grim picture of talent shortage for India’s IT and BPO offshoring sectors. The report warned that India’s IT and BPO sector will fall short of half a million people by 2010. According to the report, the number of people required in the two businesses will be 2.3 million (0.8 million for IT and 1.4 million for BPO) compared with a total of 0.7 million in 2005.

Businesses in India have been warning the government that India’s so-called demographic dividend — having more than half of its population under 25 years, and thus having a tremendous supply of workforce over the next three decades — could become a curse if the youngsters fail to find jobs for lack of job-worthy education. Only 11 per cent of those who enroll in schools make it to colleges. Even though engineering and management colleges are mushrooming and India will produce about 2.5 million graduates, including 450,000 assorted engineers and 100,000 managers in 2007, the quality of education remains a concern. According to a 2005 McKinsey Global Institute study, only 25 per cent of Indian engineers are readily employable in IT without training.

The government has increased its allocation for education significantly in this year’s Budget. The general education budget has been raised by more than 10 per cent to Rs 21,048 crore and the abysmal budget for technical education has been nearly doubled to Rs 3,858 crore. But, the question over synchronising education with real world needs remains.

The Knowledge Commission, set up to suggest ways to improve India’s education system, has recommended to the Prime Minister that the higher education system requires an overhaul to improve its quality, and that the number of universities needs to be increased to 1,500 from the present 365-odd just to improve enrolment. Both the industry and the Commission lay the blame for flawed education on the complex network of regulatory bodies such as the Universities Grants Commission (UGC) and the All India Council for Technical Education (AICTE). The Commission has recommended removal of fee caps on colleges so that they can upgrade their infrastructure and offer good salaries to attract industry specialists to teaching. It has also advised greater autonomy for universities in setting curricula and devising tests. One of the main problems of the Indian education system, according to the Commission, is that students are stuffed with information and are tested for their memory. The focus, it says, should be on skill development and testing.

Businesses themselves have been guilty of neglecting education, according to K. Ramkumar, group head (HR), ICICI Bank. Most companies want a free lunch as far as education is concerned, he says. “We have to learn from the American tradition of companies contributing to education with endowments and collaboration with universities in developing skills and intellectual property. That is the only way companies can hope to stick to their core businesses instead of running universities in their annexes,” he says.

But even as people debate who is to blame for the talent or education crunch, and how education can be better synchronised with business, the real and present situation requires companies to fend for themselves. And, they are deepening and widening their talent pool in their own ways.

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