India is having an increasingly difficult time finding qualified workers to fuel its booming services sector, despite its reputation as a bottomless well of back-office talent ready to scoop up American jobs.
According to consulting firm McKinsey & Co., India's information-technology industry could face a deficit of 500,000 workers as soon as 2010. Wages are rising 15% a year in the technology industry as call centers and software firms throw money at the increasingly shallow pool of youngsters who can hit the ground running.
India produces a huge number of engineers, but most are graduates of mediocre private engineering colleges. "I spend more time on human resources than actually doing work," complains A.M.Naik, chairman of the IT-solutions division at Larsen & Toubro Ltd. "The talent issue is going to decide who will win and who will lose" the race for profitability.
The emerging talent deficit is giving rivals such as Russia space to compete with India for high-end outsourced work such as software design and solutions, and allow aspirants such as the Philippines - where English is widely spoken - to better compete for call-center business.
India isn't alone in suffering a skills shortage. The US is sliding into one, due chiefly to early retirements by baby boomers and a lack of replacements. A skills drought in China is due partly to the fact that many of its graduates live long distances from cities where jobs are being created and are unwilling to relocate.
Genpact, formerly General Electric Co.'s outsourcing arm, has opened store-front recruiting outposts in five cities. Software firm Sierra Atlantic, of Hyderabad, tries to discourage defections by taking midlevel managers to screenings of team-oriented war movies such as "The Dirty Dozen".
India's long-term challenge is to improve its higher-education system, say executives and educators. Fewer than 10% of high-school graduates opt for further education in India, compared with 64% in the US.
(From The Wall Street Journal - 1/4/06)
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