IT industry cracks codes to check wage inflation

BANGALORE: The strong demand scenario for the IT services vendors in India which is tempered by the supply woes in getting the required talent is unlikely to result in major wage pressure. Employing freshers by the bus loads is likely to keep the lid down on wage inflation during the year.

The IT services industry is recording over 30% growth and this is not being adequately matched by the growing pool of employable engineers. According to Nasscom, the total number of engineering graduates during the FY06 was 4.41 lakh and for FY07 it is likely to touch 5.01 lakh, showing a growth of 13.1%.

Of the total number of engineering graduates, only around 25% of them are employable by the industry and this is unlikely to show any appreciable increase in the coming years.

This situation might result in certain marginal wage pressure for the IT companies as they look at hiring more number of people. During FY07, the top 5 Indian IT services companies will hire close to one lakh people.

Gautam Sinha, CEO, TVA Infotech felt that there is unlikely to be any wage hike for the freshers category as most the companies have already effected their increases in salaries.

The Nasscom McKinsey report has indicated that the Indian industry is targettng $60 billion in exports by FY10 and this will translate into an estimated demand of 8.5 lakh IT professionals and 1.4 million ITeS-BPO by 2010. It is estimated that there is a likely shortfall of 0.5 million professionals by 2010.

Analysts believe that wage hikes and HR issues like attrition are no longer solely the headache for the IT industry. “This is a problem which is spread across various segments. It is not a major issue for the technology companies alone,” said, Gaurang Shah of Geojit Financial Services.

IT companies are now increasingly looking at non-traditional routes of employing people to meet the demand. This could mean hiring non-engineering graduates to expand the employable pool.

Wipro employs quite a number of non-engineers under its Wipro Academy of Software Excellence (WASE) programme, which trains the B.Sc., BCA graduates to become programmers.

Infosys has its own large training centre in Mysore, which enables faster turnaround time of freshers becoming billable. TCS recently announced it would be starting a programme to train non-engineers suitable for the IT industry.

Nasscom has already initiated numerous steps of making students industry ready by having finishing schools as well as closer linkages with the academia.

thimmaya.poojary@timesgroup.com