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Issue Date: March 2007

India looks to youth as talent pool dries out

20 March 2007

A major factor behind India's dominance of the offshore outsourcing industry has been the size of its available labour pool. However, with IT trade association Nasscom forecasting a shortfall of around half a million professionals in the IT sector by 2010, Indian services vendors have been forced to come up with new ways to avert a potential shortage.
Tata Consultancy Services is tackling the problem at its root by developing schemes aimed at schoolchildren. For example, the company organises an annual IT quiz for pupils in eight major Indian cities, with questions focused on supposedly child-friendly aspects of IT such as the Internet, new gadgets and technology personalities. Since it was first established in Bangalore in 1999, over half a million children have taken part in the quiz, which TCS says helps to "demonstrate the fun aspects of IT at an impressionable age”.
TCS' rival Satyam is taking a more direct approach to familiarising the Indian youth with technology. Through the not-for-profit Byrraju Foundation, set up by the company's chairman B. Ramalinga Raju, Satyam has 'adopted' over 150 villages, with the aim of developing their healthcare, education and infrastructure to the point where they can become self-reliant. Part of the program involves setting up computer-aided learning schemes in rural schools, which gives pupils as young as five access to computers as part of their everyday lessons.
With some 700 million Indians currently living in rural areas, it is unsurprising that Satyam is targeting them as it looks to avoid a staff shortage. The Byrraju Foundation also administers the company's Gram IT project ('Gram' means 'village' in Hindi), a rural business process outsourcing scheme that provides employment for the educated village population in centres offering transaction and voice processing services to Satyam's India-based customers. The facilities tend to have around 50 seats and have been able to train staff to provide high-value services in a relatively short space of time, generally between three and six months.
When publicising these projects, the IT services vendors prefer to focus on how they will benefit the Indian economy as a whole, rather than just their own businesses. In its promotional material for its IT quiz, TCS talks of the need to identify and nurture talent from an early age "if nations are to avert the potential IT skills shortage”. Similarly, Satyam emphasises the work of the Byrraju Foundation in alleviating rural poverty and improving the education system across India's villages.
The fact remains that these schemes, and many others which fall under the broad and currently fashionable heading of corporate social responsibility, are motivated as much by self-interest as they are by altruism. The headcounts of the major Indian IT services players continue to grow at a phenomenal rate, TCS reported a net addition of over 5500 employees in its last fiscal quarter alone and they need a reliable supply of skilled labour to sustain this rate of expansion. With the Indian government slow to react to the challenge of developing a workforce capable of coping with demand, the vendors have been forced to take matters into their own hands.

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