But where are the techies?

• The venture capitalist, hand holding a newly arrived product developer, could scarcely believe his eyes. Even with all the contacts of an industry veteran, he couldn't locate a full-time team leader for the new firm.

So eventually he settled for something quite unimaginable, the services of a team leader from an established firm, lent for half a day every week!

The desperation of the product firm was echoed by Jasbir Singh, CEO of Pronto Networks, the US-based wireless solution provider startup that is seeking to rapidly expand its India development centre.

The turnover of developers is his biggest headache. Singh grouses that young Indians prefer to work for global multinationals and not for exciting technology startups that are going places.

The plight of Asif Khader, managing director of Cranes Software, who is rapidly upscaling to give substance to his ambition of emerging as a shrink wrapped product developer, is similar.

He feels the industry is "back to the days of the dotcom mayhem (1998-2000)" when there was an insatiable demand for domain specialists (those who know a particular business like banking well). His firm has raised compensation by 35 per cent this year, as have many others in varying degrees, in an obvious response to the emerging skills shortage.

Khader, Singh and the product firm are part of a minority who see a danger of a return to the nightmarish days of the dotcom boom when staff with any kind of skill was difficult to hang on to and compensation packages went through the roof.

But it is not as if there is no basis for their concerns. Two factors have brought about a sea-change from the situation in 2001 when smart technology startups, bemoaning the drying up of tech spending, said the only silver lining for them was the easy availability of skilled people.

One is a global phenomenon "� the return of technology spending, particularly in areas like wireless communications which touch the lives of ordinary consumers directly. The other is the large scale arrival of multinationals in India to set up captive development centres to take advantage of Indian costs.

As a result of the combined impact of these two factors, a degree of skills shortage has returned and compensation packages have again risen appreciably.

The industry is divided between those who see an emerging crisis and those who are inclined to take things in their stride. Rajiv Mody, chairman of Sasken Communications, the technology firm in the telecom space which has lived through the whole downturn and has been ramping up lately, does not seen any mayhem or cause for panic.

"Qualified domain knowledgeable individuals will always be in demand. This was true even during the downturn."

But in explaining why there is now one kind of shortage, he draws a distinction between domain knowledge and plain vanilla skills. Any knowledge of the business process will always be more valuable than the knowledge of implementing it.

"Anyone who knows the system architecture of GSM will be more valuable than someone who can write C code to implement what has been architected." Hence there is and is not a skills shortage, depending on what you are looking for.

Sridhar Mitta, managing director of venture capitalist firm e4e Labs, is able to further rationalise the conflicting perspectives.

"The situation today is nowhere near what it was in 1998-2000, though the skills supply is much tighter than what it was one-and-a-half years ago. Today's ups and downs are much more realistic and the industry does not expect any serious shortage."

Planning or the lack of it explains the difference between those who seem desperate and those who don't, even though they may be in the market for the same type of skills. Those who have planned their expansion well and have stocked up for it in terms of skills are not panicking. Those who are very new, as a company or in a particular domain and want to ramp up very fast, have an execution problem on their hands.

Ajit Isaac, CEO of HR consultancy PeopleOne, is able to locate precisely where the job market is in the business cycle. "The revival in demand for skills began around eight months ago and today there is a steady demand. Around 80,000 skilled professionals will be sought in the next 12 months all over the country. This is likely to continue for two years."

The growing demand is for three kinds of people: those with package implementation skills for solutions from the likes of SAP and Oracle; web-based technology skills; and those with core technology skills like architects and domain specialists. Isaac too seeks to separate domain knowledge from pure technical skills.

"Any knowledge of the business process will always be more valuable than the knowledge of implementation."

Srini Rajam, chairman of Ittiam, another technology firm, spells things out further. For a firm like his, recruiting and retaining top talent is always priority number one.

"It is much more difficult to recruit people with technology expertise and experience than those with entry-level skills." These are not at in short supply as the industry is much better prepared and organised now. The big players in particular have huge training set ups to break in the freshers.

But the situation is different in the case of those with expertise. Such people usually do well in their present positions and normally don't look for change. But " when they decide to make a change, they have several options to consider, so one must compete to get them," Rajam says.

Compared with 2001-2002, the latter aspect is becoming "dominant and the demand for technology expertise and experience is very strong now," he adds.

Agrees Laxman Badiga, chief executive, talent, transformation and staffing, at Wipro Technologies: "Today, there is a fight for good talent. Those with a good profile and skills in selected areas have multiple offers."

Skills demand is a moving target, explains Badiga. "Before IT skills were needed to address specific tasks. Now companies like Wipro are architecting and designing solutions entirely offshore and implementing them "� doing the complete cycle. Such change obviously changes the demand for skills."

In 1998, recalls Badiga, demand was propelled by three elements: normal growth, and the Y2K and dotcom booms. There were no legacy skills in Y2K and you needed new skills like proficiency in Java for dotcom work. Right now experience in the implementation of packages like SAP and data warehousing are difficult to find as these areas are growing fast.

In demand too are skills in niche areas like embedded real time and VLSI design.

Companies that are prepared to meet the emerging skills shortage "� among them are the big ones "� have over the last two years been recruiting graduate engineers and techies with MBA degrees. Once these engineers have three years' experience, their companies give them team leadership responsibilities which generally come after five years of work.

Also, engineers who during the downturn acquired a management label are ripe to take over managerial responsibilities. There are, of course, some techies who will always remain techies. They want to remain hands-on developers and not become team managers.

Corporate strategists also have another ace up their sleeve: recruit technical people from other industries. This is how the industry began when few had software industry expertise.

Industry leaders like Ashok Soota and Som Mittal belong to this category. So should a serious skill shortage return, mechanical and chemical engineers with a basic knowledge of science and mathematics will be making a beeline for the industry. When will that happen?

Isaac feels that the revival in recruitment in technical skills will continue for two years and if that does, "supply side issues will emerge."

When that happens, compensation packages and the cost of skills, which go to the heart of Indian competitiveness, will emerge as key issues. After two years of stagnation in compensation, they have gone up again this year.

ESOPs have also staged a comeback. The name of the game for the industry is to ensure that productivity growth remains ahead of the rise in the salary bill.

The cost of recruiting freshers is not going up but the cost of acquiring skilled people is. As higher skills make it possible to go up the value chain, there is no problem if the two keep happening simultaneously.

Right now, after a period of well over a year when prices fell and firms had to offer more value for the same price, prices and revenue productivity have begun to creep up again.

But it is a fine balance and if multinational recruitment queers the pitch for Indian costs, causing it to move ahead of the prices global customers are willing to offer, the industry will have a problem on its hands.