By Mukta Malhotra

There is no doubt it. The Indian software industry can boast of abundant technical skills, which is a competitive advantage that the sector enjoys today. True, much of India's growth in the software sector can be attributed to its low-cost pool of programmers. Consider: average cost of a software programmer in India is just about one-twelfth of what he would cost elsewhere in the United States of America or in any other developed European economies.

Sourcing software skills
Fine. But, what about the fact that a programmer would cost about 20 per cent lower in China or Russia? Over there, problems of language and the learning curve persist. These problems far outweigh the minor cost advantage these economies have. Thus, in terms of cost-quality, India continues to offer significant value for money. Not just that, India boasts of housing the second largest pool of technically-qualified English-speaking manpower, second only to the USA.

There is some truth in the saying that what the Middle East is to oil, India is to software professionals. So, in a predominantly manpower-intensive software industry, issues of manpower availability, its cost, turnover and productivity are critical issues.

Quantity of skilled knowledge workers in India seems to be a non-issue, and it would be so at least for another couple of years. According to a study conducted by the National Association of Software and Services Companies (Nasscom). The Indian software industry would require a total of 1,40,000 software professionals in the next couple of years. That is, 60,000 additional professionals during 2000 and about 80,000 more in the following year.

The arithmetic: out of 1.22 lakh engineering graduates qualifying every year in India, about 73,000 are software engineers from Indian Institutes of Technology and other regional engineering colleges. Thus, around 73,000 fresh software engineers are expected to be available annually. Total demand for software professionals during the next couple of years is estimated at 1.40 lakh. Against this, India is expected to have a pool of 1.46 lakh software engineers.

So, skilled software engineers are just about adequate in the country. Mind you, these calculations do not include standard software professionals numbering between 40,000 and 50,000, who are expected to emerge out of private software training institutes during the next couple of years. However, there are dissenting voices here. "Most CEOs cite lack of skilled professionals as one of the major hindrances to growth in the Indian software industry," says Gul Tekchandani, chief investment officer of the Mumbai-based Sun F&C Asset Management. Adds Dipankar Choudhury, vice president of ICICI Securities: "Reputed software companies might get people at the base level. But, getting somebody with an experience of more than four to six years is a problem."

Upgrading skills
That is about quantity. But about quality? Says Dewang Mehta, president of the New Delhi-based Nasscom: "It is not only the quantity, but quality of software professionals is also important." Pipes in Kumar Subramanian, vice chairman of Silverline Technologies: "Human capital is definitely a growing concern."

In a bid to tide over the problem, companies such as Silverline Technologies are hiring software professionals from overseas. Such recruitments are primarily to bring in project management skills in segment and technology. Both technology and segment expertise are needed in good combination. In India, there is a shortage of people with a combination of both these skills.

At lower levels, technical skills are more needed and business skills are necessary at higher levels. University courses do provide some exposure to these technical and business skills, but in most cases they fall short of requirements. That is why candidates invariably undergo further training and acquire hands-on experience before being assigned to live projects. The evolving nature of the software industry also necessitates that skills are constantly upgraded.

That is why companies such as Sonata Software have in-house institutes where freshers are trained for six months to a year. As business skills are also important, many Indian software companies are opting for non-computer professionals and offering them three to six months' training. Says Subramanian of Silverline Technologies: "As a step in backward integration, we have set up the Silverline Institute for Software Technology. Not only is the institute able to generate profits, it is able to supply as many as 1,000 professionals for recruitment annually."

Retaining people
Retaining skilled manpower is another major challenge before Indian software companies. Quite often, software companies end up poaching professionals from each other as they compete to attract the same pool of talent. The problem of retaining skills has been aggravated with the invasion of dot-coms which have become aggressive poachers.

Many Indian software companies are trying to stem manpower turnover by offering their employees stock options. These stock options are supposed to be disincentives for frequent job-hopping. For, longer the employment, more are the number of shares received.

For instance, the Wipro group will soon be offering 25 million shares of Rs 2 each to its permanent employees under a programme called Wipro Employee Stock Option Plan -- 2000. Says B Ramaswamy, president and managing director of the Bangalore-based Sonata Software: "Our strategy is to retain our people by providing stock options. As much as 23 per cent of Sonata Software shares are with its employees."

There are other factors that are critical to retain software talents too. Says Tekchandani of Sun F&C Asset Management: "Software companies need to have an HRD focus and good HR policies. Happy people are productive. Companies should strive to make their employees proud of their jobs. Employees should also be convinced of a career growth."

Employee satisfaction is then the bottomline. Software companies need to provide working environments which are professional and challenging, and help their employees build careers by giving them right projects with the right technology. Professional appraisal systems and performance-linked awards are also important. Says Subramanian of Silverline Technologies: "We benchmark our employee compensation with the industry's. You need to give your employees a salary compensation with the needed infrastructure, technology, stock options and other perks. Whatever the company does should be shared and transparent. These are important ingredients for employee satisfaction."

That is why Silverline Technologies is planning to come up with a swimming pool and a gymnasium next to its technology park in Thane by the year-end. The company is also working on opening an amphitheatre near its technology park. As Indian software companies discover the role of recreation and stress-relief in employee development and retention, more companies are beginning to offer recreational facilities to their employees.

Affected by the e-word, quite a few Indian software companies are offering excellent work environments with satisfying job responsibilities to boost employee morale. Open work cultures, casual dress-codes, insurance benefits, flexitime, picnics and week-day outs are some of the employee-benefits these companies are offering. Offices are no longer projected as work places.

Initiatives needed
Sure, Indian software companies are doing their bit to retain talents. But, more initiatives are needed from the government. Warns Mehta of Nasscom: "If we do not act fast, India could end up having a shortage of quality software professionals by 2003." Some initiatives have already been taken. The just set-up Indian Institute of Information Technology and Nasscom's Indian Computer Professional Institute are expected to churn out an additional 25,000 software professionals by end 2002. Besides, quite a few Indian universities have started courses leading to Masters in Computer Applications and there are private training institutes which offer high-level software engineering courses.

Good enough, but not sufficient. Indications are that even if the current software manpower pool increases ten-fold over the next five years, it is sure to be absorbed. Yes, as per a Nasscom-McKinsey report, India will need a minimum of 2.2 million software workers by 2008.