Thursday, June 02, 2005

Scarcity in the midst of surpluses

Where is the great largest-English speaking Indian workforce?


This is a period of great enthusiasm in Bangalore (and many other cities across India) with the software industry apparently booming. Its become difficult to keep track of headcount target announcements with each company trying to outdo each other. The newspapers are smiling with all the advertising revenue and hiring appears to be back at the pre-2000 level.

As an entreprenuer on both sides of the stick - we have a software services division which hires people and a staffing division that hires people for other companies - I am painfully watching the entire scenario unfold.

Attrition is an every day ordeal, as someone once said, you can't stem the river, all you can do is manage the tide. Employees routinely come with offers from the "headcount" companies which are 40% to 100% higher than their existing salaries, having been in their present job for barely a few months. Similarly, our clients in the staffing division can't stop complaining about the shortage of manpower and how they need to ramp up in the shortest possible time.


The big question I have is: where's the talent? Where is that humongous mass of “smart, amongst the most logical, ready to take on the world” set of Indians that India ostensibly claims to have?


All I see on an every day basis are a mass of mediocre professionals who are only interested in the next highest offer that can come their way; a mass of people with poor communication skills; people with barely any foundational skills; people who are extremely adept at cramming for an interview; people who are masters in the art of forging their work experience (we have had three incidents in as many months of companies calling us for reference checks of employees who never worked for us).


The dichotomy is that there IS a very large English speaking workforce – but whether it’s skilled or not is definitely in question. India churns out huge numbers of fresh engineering graduates every year – a large majority of whom are out in the streets looking for jobs even a year after they graduate. Recently, when a big-10 IT company put an advertisement out for a fresh graduate recruitment event, more than 7000 people showed up – to the extent that the company had to cancel the event and the police had to step in to manage the crowds.


Amongst the experienced set, the success rate of interviews to selection ranges from 1 in 10 to 1 in 25. That selection too I believe is more often out of the pressure to hire than an actual great candidate. With an offer decline or back out ratio running at 40%, candidates who are skilled (1 in 50 or higher), succeed in interviews across a large set of companies and then shop around for the best deal.


One of the things that amazes me the most is that I regularly see candidates who have interviewed at our services division and been rejected, go on and join a big-blue or a big-20 company. A few weeks later we even learn that the candidate has successfully gone on assignment to a client site.

Why are these companies hiring this mediocre manpower? How does it impact the India story – so hyped about? Is off-shoring and outsourcing really feasible on such a large scale?

Does India even have the manpower to meet that offshore requirement – and meet it with success? If it does, I would sure like someone to show me where they are!

I think we are very close to the 2000 scenario - a bubble about to burst - only this time its "off-shoring" rather than "dot com" that will be the cause. The India story is a good story – just as the dot com story was a good story for businesses with an actual value proposition. But we are running the same risk of hyperbole which caused the dot com bust – companies that hire mediocre resources to service customers that they were able to sign-on because of the India story – are only killing the story.

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