Focus : The Talent Squeeze

According to a survey of engineering services companies carried out by
Dataquest in 2008, engineering services account for the second largest area
(after BPO) outside enterprise IT for most large IT services companies. The
total revenue generated from this segment stood at Rs 5,688 crore, showing a
healthy growth of 25%. The engineering services share in the entire IT services
pie has increased from about 4% in FY 07 to more than 7% in FY 08. While the
business continues to grow for companies like TCS, Wipro and also specialized
providers like Tata Technologies, KPIT, Geometric and others, it is the
challenges on the HR front that is keeping HR managers of these companies busy.
Considering that India has started to emerge as an engineering design
destination and is far from the level of maturity achieved in the IT/BPO space,
the demand for engineering services professionals is only expected to grow.

This is notwithstanding the current difficult times some industry segments
like automotive are passing through. What is important to remember is that the
kind of aptitude required for engineering services is different and so are the
challenges. The total number of professionals in this industry35,000 in 2006is
expected to reach 25,000 in 2020, as per a Booz Allen Hamilton (BAH) report.

Specialized Skill-set

Engineering services is a highly specialized job wherein unlike typical ADM
services, professionals need to work on projects which require high end
engineering and domain skills. So, for example, a software professional working
with an automotive client needs to be aware of the latest technology tools of
this domain. It is a given that an employee takes at least three years to be
fully productive in engineering services. According to Regu Ayyaswamy, vice
president and head, engineering and industrial services, TCS, From the
accessibility perspective, it can be said that freshers are more accessible as
compared to lateral hires. The nature of engineering work calls for expertise
and domain knowledge. This restricts the availability of experienced engineering
professionals as compared to IT professionals.

What we require is domain skills, knowledge of work flow and process, and actual work and delivery capabilities. The first two are what we look for from outside Sachin Tikekar, chief of people operations, KPIT Cummins	Being part of the Tata Group and its reputation in the job market has helped us being known in the market, and in attracting the best talent Milind Kaulgud, head, HR, APAC, Tata Technologies	There are challenges around motivating people and building more talent. Engineering colleges and universities can help in a big way by aligning with training institutes to build training for engineers who aspire to be part of the engineering services industry Samir Yajnik, COO, Apac, Tata Technologies	Freshers are more accessible as compared to lateral hires. The nature of engineering work calls for expertise and domain knowledge Regu Ayyaswamy, VP & head, engineering and industrial services, TCS	The more upstream we are in the product life-cycle, the more difficult it is to get the right people Siby Abraham, VP, competency and operations group, technology, media and telecom, Wipro Technologies

Despite India having more than 1,400 engineering schools, only a few like
IITs and some other regional engineering colleges are considered by the vendors,
as the rest cannot provide the domain expertise required for the specialized
work.

Rani Desai, head, HR, Geometric Software, one of the early movers in the
engineering services space says, We have not seen the quality of professionals
coming from most of the colleges barring the premier institutes, to be geared to
take up challenges that the engineering services industry offers. Getting the
right middle management people has been a challenge for Geometric.

Specialists are required for the nature of services that engineering services
companies provide. Sachin Tikekar, chief of people operations, KPIT Cummins,
which offers electronic engineering services for the automotive electronics and
semiconductor solutions customers, outlines his HR requirements. He says, What
we require is domain skills, knowledge of work flow and process, and the third
thing that we look for is actual work and delivery capabilities. The first two
are what we look for from outside.

Talking about the areas where hiring is difficult, Siby Abraham, VP,
competency and operations group, technology, media and telecom, Wipro
Technologies says, The more upstream we are in the product life-cycle (product
conceptualization, architecture, design), the more difficult it is to get the
right people. However, as the largest third party R&D services provider in the
world, Wipro continues to attract the best talent from universities as well as
for lateral positions.

He feels, The fundamental challenge is one of demand vs supply, and in
availability of the right talent. For some of the projects on cutting edge
technologies, it is a challenge to find or hire an engineer with the exact skill
match. In such cases we go for selecting the closest fit as against the exact
fit, ensure that the project team composition covers all the required skills,
and that any gap is bridged through strong training.

Fresh vs Laterals

The biggest challenge engineering services companies face is the amount of
time and money they spend on the new recruits to make them capable of getting
started with specialized work. According to Sachin Tikekar of KPIT Cummins, We
provide extensive training to the freshers in some of the engineering tools so
that they become proficient. The next set of training that is required is
process related which is unique to the company and its projects. But it is the
training on actual domain which takes the longest time.

On the issue of differences between training provided for IT and BPO services
and engineering services, Sachin Tikekar says, Unlike other IT services
training wherein pure programming skills and training are required, we can make
the freshers effective in 3 to 4 months. We need to spend at least one year
before the freshers are up and running.

The training costs are huge and there is very little these companies can do
to avoid this, as there are hardly any specialized training institutions that
provide high end engineering services training.

According to Samir Yajnik, COO, APAC, Tata Technologies, What is fundamental
to engineering design services is that our people like innovation, they like to
feel accomplished and they do not want to do the same thing again and again,
unlike in the typical IT services scenario where it becomes repetitive weeks
after weeks, months after months. The challenge according to Samir Yajnik is to
motivate engineers to allow them to do what they want to do, and yet build up a
scalable model which creates value for customers as well as the company.

Attracting talent has not been difficult for Tata Technologies, one of the
pioneers of engineering services industry in India, According to Milind Kaulgud,
head, HR, APAC, Tata Technologies, Being part of the Tata Group and its
reputation in the job market has helped us being know in the market and in
attracting the best talent.

Unlimited Opportunities

Opportunities exist for professionals as companies provide cross-training
and up-skilling to ensure redeployment across multiple skills and technologies.
Employees have the option to choose their own career path from domain expert,
techno-functional expert, sales person or program manager managing large
delivery. According to Regu Ayyaswamy of TCS, Engineering services careers also
need to be highlighted and prospects of the same need to be told to students so
that they can decide to make their career decisions. Engineering colleges need
to groom students in soft skills. There is a need for specialized and customized
courses at least at the PG level (MTech/ME) tailored for the industry. Academic
institutions need to involve the industry to sponsor, research and participate
in curriculum formulation.

Scarce engineering services talent is up for grabs not only by the
specialized engineering services firms, but also in captives who have set up
their shops in the country. But there are captives in India who also outsource
to some of the outsourced entities in India. The strategy that most of the IT
services and engineering services companies adoptvalue for money hiring, or
good talent at reasonable price seems to be working well. Except for one
hurdlethese companies charge captives of paying more than what should be the
market rate. It is an open secret that captives pay substantially more than
the engineering services companies which is why the tough fight for the limited
talent that is available.

The Way Forward

So what is it that needs to be done to be better prepared for the ensuing
shortage of high end skills? There are no straight answers to that. But the real
issue iswho will bell the cat? The industry thinks it should be universities
and universities look at industries for support, which has been coming but not
in the fullest terms.

According to Regu Ayyaswamy of TCS, The engineering colleges need to
introduce courses that impart domain-specific training. Never before has India
seen the level of product development that it is seeing currently. This poses
major challenges in terms of getting deployable engineers with practical design
expertise.

Nasscom has also acted on the advise of BAH to create a forum within Nasscom
to focus exclusively on engineering services outsourcing. According to the study
done by BAH in 2004, automotive and construction/industrial had the highest
level of average experience, about 5 years, followed by high-tech/telecom (4.6
years), aerospace (4.1 years) and utilities (3 years). The problem, according to
BAH, is likely to persist and Indian vendors will have to manage through the
supervision of much more senior engineers. Another strategy which BAH suggests
is that companies can bring in experienced local engineers or returning
expatriates, which the company has found especially useful in bridging cultural
gaps between foreign clients and local engineers.

According to Samir Yajnik of Tata Technologies, There are challenges around
motivating people and building more talent. Engineering colleges and
universities can help in a big way by aligning with training institutes to to
build training for engineers who aspire to be part of engineering services
industry.

Sudesh Prasad

sudeshp@cybermedia.co.in