The shortage of information and communications technology (ICT) skills in developed countries could become a serious issue once the worldwide economic crisis starts easing.
This will be exacerbated by the falling number of masters and PhD holders in science and engineering, restrictions on cross-border movement of IT professionals and the US H-1B visa programme. However, this vicious circle could be mitigated by the Indian service firms increasingly recruiting internationally, according to a new OECD report on employment trends in the ICT secto
The report notes that Indian tech firms like TCS, Wipro and Infosys have seen slower recruitment since the first quarter of 2008. However, the pent-up demand in the European economies and the US will ensure that good workers are available for the taking when these companies are looking to further expand their international operations.
“Concerns have been raised whether increased offshore activities could lead to a shortage of ICT skills in the OECD countries in the long term,” the report said, adding that such a shortage could reinforce the need for further offshoring as ICT skills shortage is known to be a driver for offshore outsourcing.
The report said that while no additional largescale layoffs have been announced by the top 10 IT services firms, employment levels will stay at almost the present levels until 2009-end. IT services firms like IBM and Cap Gemini have announced slower hiring for 2009. So have Indian IT giants like Tata Consultancy Services (TCS) and Infosys, which despite the crisis, still expect to grow in single digits in the third quarter of 2009-10.
The economic crisis has put IT service costs under pressure, but this may benefit outsourcing due to the increased internal cost-cutting and perceived benefits from more flexible external sourcing of IT and business process services. The recent quarterly data on the outsourcing markets indicate that despite the number of outsourcing transactions still on the rise, revenue growth through IT and BPO will probably decline in 2009, due to the falling total contract values (TCV), the OECD report said.
However, the Asia-Pacific region has been performing well with TCV in the first half of 2009 increasing over 150 per cent over the first half of 2008. The report suggested that higher TCVs in the APAC region could explain the optimism of the Indian tech service firms who have been changing their product-product mix to adapt to the changing market demands.
“Recruitments have already started to slow in the beginning of 2008 when new hiring by leading Indian service providers dropped 22 per cent in the first quarter of 2008 and by almost 50 per cent in the second quarter compared to the same period one year earlier. These lower recruitment rates are also reflected in the decreasing number of new offshore centres opened by IT services firms,” the report added.
Wednesday, November 25, 2009
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When you use the phrase "labor shortage" or "skills shortage" you're speaking in a sentence fragment. What you actually mean to say is: "There is a labor shortage at the salary level I'm willing to pay." That statement is the correct phrase; the complete sentence and the intellectually honest statement.
ReplyDeleteSome people speak about shortages as though they represent some absolute, readily identifiable lack of desirable services. Price is rarely accorded its proper importance in their discussion.
If you start raising wages and improving working conditions, and continue doing so, you'll solve your shortage and will have people lining up around the block to work for you even if you need to have huge piles of steaming manure hand-scooped on a blazing summer afternoon.
Re: Shortage caused by employees retiring out of the workforce: With the majority of retirement accounts down about 50% or more, most people entering retirement age are working well into their sunset years. So, you won’t be getting a worker shortage anytime soon due to retirees exiting the workforce.
Okay, fine. Some specialized jobs require training and/or certification, again, the solution is higher wages and improved benefits. People will self-fund their re-education so that they can enter the industry in a work-ready state. The attractive wages, working conditions and career prospects of technology during the 1980’s and 1990’s was a prime example of people’s willingness to self-fund their own career re-education.
There is never enough of any good or service to satisfy all wants or desires. A buyer, or employer, must give up something to get something. They must pay the market price and forego whatever else he could have for the same price. The forces of supply and demand determine these prices -- and the price of a skilled workman is no exception. The buyer can take it or leave it. However, those who choose to leave it (because of lack of funds or personal preference) must not cry shortage. The good is available at the market price. All goods and services are scarce, but scarcity and shortages are by no means synonymous. Scarcity is a regrettable and unavoidable fact.
Shortages are purely a function of price. The only way in which a shortage has existed, or ever will exist, is in cases where the "going price" has been held below the market-clearing price.
Well we must realize by now that IT is mature industry, and one cannot expect hikes every year or faster promotions every year..because there are just too many of skilled workers available...and ready to work for fraction of existing market rates.. so if you are planning to get into IT - give it second thought as you are preparing for uncertain future fully or more of dependent on international market. And the type of work in IT is not really creative but a administrative one...developing repetitive software programs of similar nature like- Add / Modify / Delete and maintain business rules.
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