India facing IT manpower crunch: Satyam official

KUALA LUMPUR: The world sees India as the mecca of Information Technology, but the country is facing a shortage of skilled manpower in the field, a top official of software giant Satyam said here, stressing on the urgent need to set up more technical educational institutions.
     
"The top four IT companies (Satyam, Infosys, Wipro and TCS) hire most of the talent in the country. There is a serious dearth of skilled manpower for the other hundreds of IT companies," Virender Aggarwal, Director and Senior Vice President of Satyam said here.
     
Despite being the smallest of India's Big Four outsourcers, Satyam's sales have tripled in the last five years, and its workforce has grown too with the company planning to hire another 15,000 this year.
     
The company was named on Tuesday by Forbes Asia as one of Asia's best 50 companies based on its long-term profitability, sales and earnings growth, stock price appreciation and projected earnings in the region. The companies selected have a market capitalisation or revenue of at least USD five billion.
     
Aggarwal, who oversees global operations in Asia Pacific, Middle East, India and Africa and was here for the awards function, said India's education capacity was not increasing and the Government was not able to increase engineering colleges at the same pace as the burgeoning demand.
     
"The Government needs to spend lots on education," he said and noted that this situation with "less manpower resulted in wage hikes making it difficult for both the companies and the end users."
    
This is why companies are forced to outsource jobs since salaries sometimes become unaffordable, Aggarwal said.
     
Satyam, which considers itself a global company, hires foreigners if the cost structure so requires. "There are countries where the locals are cheaper to hire than to bring in someone from India," he noted.
     
The company has moved from answering phones for clients to helping them design kitchen appliances and aerospace components, Satyam officials said.
     
Trying to reduce dependence on the US market, Satyam has been aggressively expanding its presence in the region
  
The company delivers consulting, systems integration, and outsourcing solutions to clients in over 20 industries.
     
On future strategies, Aggarwal noted that in Asia the biggest country which it had not been able to crack was Japan.
     
"The entire IT industry is facing this problem," he added. The Japanese economy, according to him, was as big as Europe.
      
"Several things made it difficult to enter the Japanese IT market, namely language as almost all business is conducted in Japanese language," he said adding that local talent was low there with the youth population shrinking.
      
"The Japanese were very slow in computing, the back office systems were not sophisticated and software systems and productivity of workers were not high."
      
He admitted that the Japanese were good in electronics, hardware, "but not in software."
       
He said the Japanese were insular but "they are also changing because of tremendous global competition."
     
Satyam is also actively involved in Australia. The operations there contribute eight percent of Satyam's global revenue.
     
Aggarwal said the slowdown in the US economy had not hit the company yet as the demand for its products were still strong and the order booking also strong.
      
However, he expressed concern over the strengthening rupee. "That is a worry," he said adding that the government should ensure that the rate of appreciation is steady.
 
Aggarwal felt that the government should step in and see that India spent dollars abroad so that an inflow and outflow balance was maintained. "A gradual rise in rupee can be handled," he said adding that a very strong currency at one go could have an impact on the industry which could witness hike in wages and manpower shortage.
      
"The situation can become an issue," Aggarwal added.
       
He said to tap India's domestic market was the company's next strategy.
       
"The stragegy will be to focus on Indian internal market. The industrialists are brimming with skyrocketing self confidence," he said.
      
The global solutions provider has also spread to Middle East, Africa (with contracts in Nigeria, Kenya, Ghana). He said South Africa was a growing market.
       
He said the company's Asean strategy revolved around using Malaysia as a key provider of technical talent.
      
He said the Chinese people trained in China by Satyam would be used in Japan (as the script of the two languages were similar).
       
"Today we just don't represent India but we take international nationals", he noted but added "everyone wants a India exposure to be part of their resume."