IT sector grapples with severe skill shortage

India might be training more information technology professionals than most other countries. Yet, the sector is facing a severe talent crunch.

Companies are finding it increasingly more difficult to fill vacancies. While IT companies are projected to hire 3,00,000 professionals by March 31, 2007, according to a study conducted by Accenture, the country's 1,400-odd engineering colleges will churn out only 2,20,000 graduates "" 80,000 short of the demand.

More importantly, only a small fraction of these have a good grasp of fundamentals and are employable. The bottomline is, these schools aren't churning out the right talent. This is reflected in the low selection ratios.

"The IT industry is facing a talent crunch as the success ratio of software professionals is as low as three per cent. The reason is lack of clarity in fundamentals in the respective domains," Ajay Chamania, vice president, product-engineering services, Patni Computers, said.

At JK Technosoft, after screening nearly 100 profiles, 80 are rejected due to lack of project skills in their profiles, while 20 are considered for the recruitment process. Finally, three are selected and only two take the offered job.

HCL Infosystems Executive Vice-President, marketing, George Paul, said: "The IT companies have started tying up with the educational institutions and impart training as per their requirements. As a result, several small and medium sized IT companies prefer to take software professionals that come through references."

"Nearly 49 per cent of applications come through references. In such circumstances the rejection rate is very less," Smita Sah, HR manager, eInfochips, said.

The shortage of professionals has also resulted in a high attrition rate in IT companies. The average attrition rate in software companies has doubled in the last couple of years to 20 per cent, compared to 9-10 per cent in 2004-05.

An NIIT advisor accepted that a large number of candidates were found not suitable by various companies, but ruled out any migration of IT investments to other skill-abundant markets.

A recent Nasscom-Booz Allen Hamilton study pointed out that the government should liberalise rules to allow more private-sector participation in education.

Passing a law that would allow companies to pay for two years of education in exchange for a two-year contract could also go a long way towards expanding the opportunity for software professionals.

"We should start various initiatives for effective backward integration of India with the educational institutes and universities," said Abhishek Singhania, managing director, JK Technosoft.