Thursday, April 14, 2011

IT, manufacturing in talent tug-of-war

If the slowdown meant the information technology (IT) sector's loss and the manufacturing sector's gain in terms of acquiring engineering talent, it's status quo once again. The software field has always attracted the best of talent on the back of higher wages, lucrative onsite assignments and a five-day week, but when hiring slowed down over the past couple of years, engineering graduates gravitated toward manufacturing.

However, this trend has been short-lived and the scales have tipped in IT's favour again. Consider this: India will probably witness 450,000 to 475,000 engineers graduating this year, of which almost half are expected to be hired by the IT industry . "Around 200,000 engineers and 20,000 MBAs and other graduates are likely to be hired by IT. Other industries will have a tough time finding good talent," says T.V. Mohandas Pai, Director and HR chief, Infosys Technologies.

The pressure on supply will lead to salary inflation in manufacturing. Companies see wages increasing any where between 20% and 30% this year. P. Balendran, Vice Presidentof carmaker General Motors India, says last year the average salary hike in manufacturing was 12-15%, but this year it is expected to go up to 20-21%. As students from tier-I colleges opt for IT firms, GM has been forced to recruit from diploma and industrial training institutes (ITIs).

S. Vishwanathan, Managing Director of John Fowler, a manufacturer of filters and filtration systems, says the manufacturing industry primarily hires mechanical engineers, but the IT industry is interested in them too. "It is difficult to get good engineering design engineers," he notes, adding that salary levels in manufacturing have gone up about 20% since the slowdown. Here, C.S. Kumar, professor of mechanical engineering at IIT-Kharagpur, points out that since mechanical engineering students have strong analytical skills, they are a natural fit in the IT industry.

Murlidhar S., co-founder and COO of MeritTrac, a skills assessment company, also estimates the wage bill inflation for the manufacturing sector at the entry level at 25-30%. "The IT sector itself will have to pay 15-18% more due to the competition. Big IT companies currently start with salaries between Rs. 200,000 and Rs. 270,000. Manufacturing pays 30% less at the fresher level. They would have to match up," he says.

Raja Radhakrishnan, Senior Vice President (Human Resources), ABB India, foresees a supply shortage for the manufacturing sector this year. "Although India has ample engineering talent, we find qualitative talent hard to come by. Engineers today need to be trained even after they pass out. When it comes to companies like ABB, there is a higher incubation time for retooling and imbibing skills," says Radhakrishnan. Sanjay Shelvankar, CEO of talent acquisition solutions company ScaleneWorks, says IT firms now hire functional people, even at the fresher level, to service verticals such as manufacturing.

The trend will only accelerate as firms focus more on specialisation. Market watchers advice manufacturing companies to have better campus initiatives. While many multinational manufacturing companies do have campus programmes in tier-I engineering colleges, they can hardly match up to the well-oiled recruitment engine of the IT industry. Kumar of IIT-Kharagpur notes that manufacturing firms have to increase their presence in tier-I campuses by sponsoring programmes and chairs, just like the IT industry, by setting up labs with state-of-the-art equipment named after them and by offering scholarships. "Manufacturing has to build good connections with colleges, invest in relationships, pay more, offer good careers and internships to become attractive employers. Today bright talent has many more opportunities," sums up Mohandas Pai of Infosys.

Source: Financial Express, April 14, 2011

No comments:

Post a Comment

Blog Archive