For how long will your job stay?

I know this a scary question but let us face it for once. I have been doing an analytic study on this for a long time and telling it to many people from our IT sector. Better we understand this now or it will be too late.

I have already stated one very important point in my previous blog post that “IT professionals” constitute 85% of the IT community. (Not taking into consideration the entrepreneurs/business promoters for the time being). The majority of our daily work (technology services or business services) is done by these IT Professionals. The “work” is given to us (India) primarily because of low cost arbitrage. That does not denote work only comes to India because of fairly low cost. The skilled resources (IT professionals) are affordable that is the primary reason why work comes here. This is a true fact and let us accepts it.

For a company there are two kind of costs:

  • a) cost of resource
  • b) other costs – infrastructure cost, various kinds of taxes etc.

Cost of resource is the primarily cost factor (80%) and if it increases work may not come to India. And this alarming trend has already started. A time may come when you (IT professionals) have skill sets but no job is there in the market.

So what are the solutions?

My recommendations are divided into two parts:

a)      For the employees –

    1. A Fresher, who is new to the industry, must not worry about salary (as long as they are at par with the market). I keep hearing fresh graduates saying, they are not interested to join an SME because “they pay lesser”.
    2. Do not keep asking for a salary hike.
    3. Speak with your employer and do some extra work and earn money. I am not telling you to do freelancing (hidden manner) by stealing company clients. What I am suggesting you to do is, “go and teach few students, who need you as mentors”. I know some developers who are teaching students after work or during the week ends. They are earning well and have stopped asking for salary hike.
    4. A visible problem with the IT professionals – they keep changing jobs and hopping from one company to another. I have asked few of them the reason for this and they have told me “we change jobs because of career growth and for security”.  I ask them “how do you define career growth? Do you think salary hike is equivalent to career growth?” Most of the times I do not get any specific answers from them. And as far as security is concerned I tell them “No one is secured. A company is not God” and I even tell them “Your Company will not take away your job; you will lose it because of market forces”.

To the employees: Remember one thing, the more you change your jobs just for a rise in salary, the more you are increasing your “price”. A day might come when your job will be given to someone else in some other country even after you have the skill set.

  1. An important piece of advice for the students – higher education is not for everyone. I have seen many engineering graduates, who are unable to find work through campus recruitment, start applying for B-Schools. They simply do a blunder. I am not saying this because I have anything against management studies. Think of this situation, which is sadly a reality. An engineer spends almost 2-3 lakhs for his engineering course, then goes for management studies and there he spends another 4-5 lakhs. (Just imagine the state of the parents). So after passing out from a B-school 90% of the candidates are “qualified” but cannot be afforded by 80% of companies just because the candidate’s salary expectation is way higher now.

So my appeal to the students community – after passing out if you do not have a particular skill set then instead of doing some higher studies go for the following

  1. go to an institute and learn a particular skill set (PHP/SEO Content Writing/Ruby of Rails etc)
  2. go work in an SME or a start-up and learn the skills
  3. Find mentors from the IT Community who can help, teach and guide you.

b)      For the employers  –

  1. My appeal to the SMEs and start-ups is that do not expect that best students will join your company. Rather take normal students (with basic education) and train them up (increase your training & development costs). The more qualified candidates you take, your resource cost will go up. And from the very beginning “do not expect them to stay with you for lifelong.”
  2. The start-ups need to be more professional and organized so that students can join your company to learn. I have asked many students why they do not prefer to join a start-up (companies with less than 3 years into operation) and they reply “start-ups are not professionals”.
  3. Go to various districts and recruit students from those areas. ( Follow ZOHO’s model)
  4. My appeal to the companies who are into training business – keep the price of courses as low as possible ( without compromising on the quality) so that a student after completing his graduation can afford to pursue the course. (80% do not go for any course after graduation due to affordability issue).
  5. Another important point: Do not move to some other location just because the other location is more posh, they organize tech events etc. Think like a business man. Move to a place where your resource cost does not go up. Remember work comes to you as long you have a team (human resource) who can be afforded. Think smart, think inclusive.

There is a huge opportunity in the IT business. The total IT, global and domestic, addressable market by 2020 would be USD   1.5 – 1.6 trillion. The question (concern) is “can you (companies) tap this market”? Or “will your (IT professionals) jobs move to some other locations”? 

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Continuous flow of “Low Cost Skilled Talent” is the NEED of the hour– Simple Case Analysis

A simple case analysis to find out the need for continuous flow of low cost skilled talent(human resource).

Let’s say there are 5 IT companies who are into web development. Each of these companies has 10 IT employees. Out of these 10 IT employees – 2 are designers and 8 are developers. Assume all of the 8 developers are working on open source technologies.  So that means total existing resource = 2*5 = 10 Designers and 8*5 = 40 Developers. Total = 50 resources. Now imagine cost of a designer is Rs 5k per month and for a developer it is Rs 8k per month. As the business requirement increases, resource crunch takes place in a particular organization. Due to lack of flow of fresh talents, the company tries to pull resources from other existing companies. So the same designer whose rate earlier was 5k per month, now is hired for 8k-10k. Hence the cost goes up.  So a project/work which the company was previously doing at X amount of money, now to do the same kind of work it costs 2X. This is because the resources hired are now costlier than before. But, the company at the same time also has to make profit.  The companies are unable to find fresh talents with required skill sets because they are not available. Hence, flow of fresh skilled low cost talent is required.

Lets look into another case, with the example as above stated company structure – 2 designers & 8 developers.  In most cases a single developer can handle a maximum of 2 client projects (if the scope of project is more, then minimum of 2 developers can handle a single project).

Development is not just coding, but it also includes documentation, client interaction and testing.  Hence a single developer has to devote almost 10-12 hours in a day to work on 2 client projects. Question is why the developer is working on 2 projects and why not 1?

The answer is very simple; the company does not have any other options.  Companies cannot hire fresh talents because they are not skilled as per the requirement and the companies are not able to hire from outside(other companies) because to hire the resources they have to be paid more and if the resource cost(hiring cost) goes up, the project cost will go up and ultimately the company will lose the  project/client.

And those developers who are working on 2 client projects, does not get time to do self study, their quality degenerates and productivity gets affected and all these ultimately affects the clients.  Hence continuous flow of fresh skilled low cost talent is required to stabilize the situation.

Remember the keywords: Continuous, Fresh, Skilled, Low-cost. You cannot ignore any. To achieve the exact match continuously is  really a challenge, which most of the SMEs are facing all over India.

Note: Companies here in the study denote SMEs with employee strength 1-20.