The report identifies a manpower gap of 500,000 staff by 2009, when the market is estimated to require 2.1 million people for IT and IT-enabled services. In 2003 these industries employed 400,000 staff. The estimates are based on the current 13% annual increase in graduate supply, but only 1% or 2% of these graduates are capable of or will choose to enter the IT-enabled services industry, for example.
The findings could be a significant blow to the growth of the Indian offshore industry, which is increasingly competing for business with other low-cost countries such as China, Philippines, Mexico, and the Czech Republic. Unlike these other countries, India has long been perceived as offering a more dynamic and cost-effective base for offshore operations due to the country’s large supply of English-speaking graduates and experienced IT technicians. If accurate, KPMG’s findings indicate that this advantage will not last much longer.
A lack of manpower will compound other labor-related issues such as attrition rates within call center staff, and growing salary levels. Attrition rates, particularly in IT-enabled services such as call centers, were between 30% and 40% in 2002-2003. The total cost to a company of an average employee moved to $330 per month in 2003 from $200 per month in 2001, according to the report.
This article is based on material originally published by ComputerWire
