Mid-sized IT firms go for experienced hires

As India moves ahead to become a high-end technology outsourcing destination, information technology (IT) companies are finding it hard to tap the required talents with skill set of specific technologies.

In many cases, clients also prefer experienced employees for niche projects, which is only adding to the woes of the IT services providers. According to industry experts, this is posing a major hurdle for the mid-sized IT services companies, as they have to manage cost, margin and projects with available talents.

“Most of the new projects are very important for the clients which requires niche talent. As the projects becoming more technology-driven, many of our clients are asking for experienced employees. Our aim is to satisfy our customer demands, for which we do more lateral hiring than freshers,” said Anand Talwar, senior vice-president (talent management), ITC Infotech, a mid-sized IT company.

Traditionally, Indian IT companies depend mostly on campus recruits to meet their hiring plans. The employees hired from campuses are being given training before being inducted to projects. However, the new demand from the clients has created pressure on these companies, as higher employee cost will affect the margins.

For example, ITC Infotech employs around 3,500 people, and hires 75 per cent of its workforce through lateral recruitment. It sees a huge impact on its margins because of high employee cost.

“When we hire more laterals it creates an impact on our margin, and this is one reason why we believe that our margins are less compared to other players,” added Talwar.

Another mid-sized company, MphasiS, said as the market was evolving, the dependencies on experienced employees were increasing. Most of the new projects require resources with specialty in technology domains like ERP, data warehousing and business intelligence.

Said Babuji Abraham, HR head of MindTree, another mid-tier IT company, “We are facing the demand for experienced people from some of the new clients which we have added. Earlier also, the Indian IT industry was facing the shortage of experienced talent. But now, experience does not mean the number of years you put in a company, but the competency you have in a specific domain.”

Headhunters believe as the market is coming out of recession, there is a huge movement from many smaller firms to larger companies. This has created a shortage of skilled employees for many mid-tier companies.

“Mid-tier IT companies can’t afford to hire more freshers and then train them on the job as many of them are specialist companies which offer niche technologies. At the same time, many large software product companies are also looking for experience employees,” says Abhishek Udayai, MD of HR consulting firm Talentar.

In order to meet demand and supply, companies have also started initiatives to train employees in some specialised domains based on the need of the clients and the projects.

“Now when we go for hiring, we look for people who have additional certifications in any domain. We are also making initiatives to certify our existing employees in specific domain related to their projects,” added Abraham of MindTree.

Pune-based KPIT Cummins also said it was having specific training and certification programmes to groom the talents.