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Focus : The Talent Squeeze

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DQI Bureau
New Update

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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

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