Honestly, I feel if $ falls, it's surely going to take down IT with it. We all know there are projects outside US... Indian market itself is worth billions of dollars and all that crap. But US plays a very significant role in keeping the industry alive for two reasons - 1. As with any other commodities, they are THE consumers of IT services. There are other consumers too but relying on them for minting money isn't going to work because their volume of consumption put together, is not even 1/10th of US and 2. The profit margin is not going to be as high. The exchange rates might be better than USD but considering the volume of operations, it is going to yield only insignificant profits. Perhaps reason 2 is a derivative from reason 1. The industry will not obviously vanish; but maintaining the lion's share is out of question.
The worst nightmare for the Indian government would be the day this happens. Imagine thousands and thousands of educated jobless youngsters in the society. Perhaps 10% of them might be smart enough to switch fields or start their own business or do something that works to survive. But what about the rest? It reminds me of my high school days when I used to write civics exams where the most common question would be "What are the economic problems of India" and point #1 would be population and point #2 would be unemployment. We never gave upon #1 but #2 might take a new dimension if IT goes for a toss.
Pudhiya thatthuvam 100020: Kannaa vaazhkai oru vattam maadhiri... Innnaikki maela irukkuravan naalaikki keela iruppaan... Innaikki keela irukkuravan naalaikki maela iruppaan! :D
10 comments:
You don't need to be so eschatological about the future of IT. Here's why.
Undoubtedly, the economic slowdown around the world is bound to impact the Indian software industry. But Indian IT companies have been "overdoing it" for years.
They have had the habit of recruiting a good 20% more than requirements. This has led to a bloated bench. Companies in America will not be able to afford such bench strengths, but Indian companies are able to, because of the value of dollar.
Second, Indian IT companies dole out big salary increments and bonuses to their employees - on an average, these increases are much higher than what their American counterparts receive.
So, like every industry in the US that needs some tightening, the software industry in India must also tighten its belts.
That said, while some job and salary cuts are inevitable in a slowdown, there is still tons of IT work left to be done, and India's role as the glorified back-office is sure to continue. Though not at the same pace.
Though not at the same pace.
That was my point. It's not just 20% additional recruitment. These ppl have lost their requirements sheet long back. Imagine the number of campus recruits alone. In the past say 3 or 4 years alone every major IT player has recruited ATLEAST 2000 persons per year. If the point comes where a bare minimum of 50% of this extra population has to be withered off, that is when you will have thousands of unemployed youngsters in the streets knowing not what to do.
IT will be there but on a much reduced and more reasonable scale of operation; and at this point we have come way too far to look back and be reasonable. :)
Well, but if you take a closer look at the dynamics of the business, you will understand that it is always about having the supply ready, and then locking up the demand.
In a way, bench strength is one of the selling points for these companies. They can tell a client that they can ramp up operations in a week's time, or even shorter.
I for one believe that self-pity is never an option. If these youngsters get fired, they deserve to. In business, you must be mean and street-smart to get ahead. So these youngsters who are on bench must ask themselves how they have utilized their bench time. What have they done otherwise that merits their stay on the company's payroll? If their answer is not convincing enough, companies should have no qualms about showing them the door.
I personally believe in performance driven employment and appraisal. If somebody doesn't deserve a place in the company, s/he shouldn't be there. But let's look at the realistic scenario. There is absolutely nothing called recruitment criteria. Most of the time, the only question asked in the interview is "What is your name?"/"Introduce yourself". Even if a really eligible candidate gets through and he is already familiar with almost every technology in the market, unless he is given a chance, he has no way to prove himself and you must be knowing that a lot of guy stay in bench for over 6 months.
I've been into estimations and RFPs myself and I know bench strength plays a major role in showing off the company's potential; but I strongly feel that developing bench strength should've followed some standards. Just because you have to have bench strength you cannot go about bringing in every Tom, Dick and Harry into the industry. Our companies lost this track long back and now is the time they have realized the suffocation. In the end, the ones who are going to be affected are these youngsters who were rushed in and those who have taken up IT, CSE and related courses just in the dreams of getting recruited in some of these companies. Even though the companies are trying to get back into the right groove, we are bound to face a huge spike in the unemployment rate atleast for a few more years and I'm sure that is going to give a tough time to the Government.
There is a fallacy in your argument. While concurring with my view that those who do not deserve to be in an IT company should not be there, you have concluded your comment by appealing to the emotional "Oh, pity these guys" angle.
There is no doubt that the recruitment policies of Indian IT companies are to blame. But that is no reason for those warming the benches to turn slackers. When they read newspaper / magazine articles that talk about dog-eat-dog competition, were they thinking that such things happened in an alternate universe? Slacking deserve comeuppance, and they must face up to it.
I don't think India's IT majors would fire someone who has, say, a Sun Certified Enterprise Architect or a Microsoft Certified Solutions Developer credential just because they are in this kind of a downturn, would they?
Not exactly Vijay. I guess you got me wrong. My conclusion was not that undeserving candidates should still be given a chance. My point rather is that IT companies have lost calculations long back and because of that, they ended up making a lot of indirect false promises to the society and in the end, a lot of people 'felt' that IT is the way to go.
So from a socio-economic perspective, if these companies become truthful and practical all of a sudden, we are bound to face unemployment on a mass scale; whether the move from the IT companies is towards the right direction or not.
Coming to the bench population, nobody having SCEA or MCSD would be fired but honestly do u expect freshers and beginners to clear these certifications? If they could, will those exams carry any meaning any more? At the same time, there might be bright and brilliant minds among the freshers that could be moulded by the industry and experience. This whole shrugging off process will throw him off into a never ending contest for a job and except for the cream of creams who either tactically change fields or outstand technically, nobody will have a job to go to; and the worst part is that the fault is not actually theirs. They did their best to get into a good college, scored good marks, joined a good company and prepared themselves for their first project; and it is the fault of the recruiting company to have got him in without a real requirement; tossing him into an ocean of jobless folks! Don't you think they are morally responsible for this? What is the whole point of following normal distribution when you can't afford to have anything but the cream of creams? I hope you got my point and the difference between giving jobs to unfit people and taking a capable candidate out of his job just because the company did a mistake in calculating the required workforce...
So if a company will not fire someone with an SCEA or an MCSD, what stops the bench-warmers from working towards some such a thing? If those credentials are far-fetched, surely an MCP or an SCJP would be a good first step. Is it the company's fault that these people, whose achievement in life was to pass their BE exams, and thought that would see them through in life? The question to be asked of them is "What have you done to merit continuation?"
Your contention that "IT companies made a lot of indirect false promises to society" is absurd. In my experience, employment offer letters do not come with a guarantee of lifelong employment irrespective of performance or external factors.
A company is well within its right to fire employees it deems excessive to requirements. A candidate accepting employment at a company must know about bench, and his probability of spending time on it. Despite such knowledge, if someone accepts employment, he is deemed to fully accept the consequences of his actions.
You are trying to forge the discussion into one that blames the companies entirely. That would be true only if these companies recruited with the sole aim of firing the selfsame recruits. To be fair, these companies try their best not to fire employees.
But in a "depression" as this, the company is as much (in fact, much more, but Indian companies would never have the gall) accountable to its shareholders as it is to employees.
These employees planned their extravagant lifestyle and excesses based on the "things will be rosy forever" scenario. The society which you think has been wronged has till now been in a bubble, and is now hitting reality.
Finally, I don't think the firing, if any, would be as bad you expect it to be. I see the computer software industry as having much more work left to do, and you can bet on its growth... when, and not if things start picking up.
The real challenge for Indian IT in the future would be to deal with the increasing commoditization of IT.
So if a company will not fire someone with an SCEA or an MCSD, what stops the bench-warmers from working towards some such a thing? If those credentials are far-fetched, surely an MCP or an SCJP would be a good first step.
SCEA will surely help retain your job. But don't tell me that SCJP does.
Is it the company's fault that these people, whose achievement in life was to pass their BE exams, and thought that would see them through in life?
I never said that's their sole aim. But when they join the company that's the best they could do and even if they do SCJP in the meantime, I'm sure it doesn't assure job security! Almost 50% of the benchers have some kind of certification.
Your contention that "IT companies made a lot of indirect false promises to society" is absurd. In my experience, employment offer letters do not come with a guarantee of lifelong employment irrespective of performance or external factors.
No job can promise this. I agree. But when you see a market where thousands of people are recruited and everybody makes a decent sum of money, it is a hope to the society that they have a new high employment stream that'd suit their own kids and family members. But when they complete their graduation and IT crumbles in front of their eyes, the major share of responsibility is with the IT companies that 'overdid' things. After all, 80% of the engineers end up in IT and the parents had their calculations done before getting their kids into this stream. Even though every individual's position cannot be guaranteed by the IT companies, on a larger scale, on an ethical front; their failure to estimate the actual requirements is the major influencing factor in luring people towards IT.
To be fair, these companies try their best not to fire employees.
Completely agreed. The entire discussion is about the IF situation of US going down.
But in a "depression" as this, the company is as much (in fact, much more, but Indian companies would never have the gall) accountable to its shareholders as it is to employees.
Exactly. But while they couldn't choose their stock holders, they did choose their employees. So a meaningful prediction would've helped a lot of youngsters take a look at alterntives.
These employees planned their extravagant lifestyle and excesses based on the "things will be rosy forever" scenario.
Personally, as you said I completely agree that it's the company's sole right to hire or fire employees no matter what the reasons are. But coming out of the recruiter's perspective or the legal perspective and looking at the whole thing from a socio-economic perspective, the major IT players are the ones who created hopes in everyone and blew up the bubble that the society got into. That is where I feel they should've been more sensible. Even in the US, employees are fired in the name of restructuring which I feel isn't a horrible thing. The reason is they always knew their limits, recruited within their limits and cross-checked their limits every now and then. But our IT players hardly do anything of that sort. A Google or Microsoft or Trilogy cannot be held accountable for anything because they are always very strict about their recruitment policies and they ensure that they get only those who are really suiting them. But just because IT services is a resource driven business, these people knew no bounds and they hardly cared about the recruitment volume or quality. It was just a game show of competition between the vendors and that in any logical view is unacceptable considering that a large volume of the employees are risking their careers because of this and they might not even be aware of it.
I see the computer software industry as having much more work left to do, and you can bet on its growth... when, and not if things start picking up.
As I said, IT will be there as long as computers are being used. But the whole 'bubble' that you spoke about will vanish in the air if the greatest IT consumer economy stops consuming. By then, we will surely end up in a serious hike in unemployment but again it'll stabilize down the years. But how the Government is going to manage that sharp spike is the question.
Overall... I agree that in a strict sense, the employers reserve the right of hiring and firing. But considering this specific example, I think over-doing things were the biggest fault of these companies which not just jeopardize them but also the people who take up their careers with these companies.
I think we are beating a dead dog. You won't step away from your view that it is entirely the mistake of the company. And I don't see myself relenting on the "It's the employee's onus" angle.
It is the company's fault only insofar as the company playing along the industry dynamics.
At the end of the day, it is the fired employee who suffers more than does the company, which can cover its loss of face by claiming it had no other resort in a failing economy.
You might want to note that I have also worked in one of these companies. So, your contention that 50% of people on bench have some certification is patently untrue. It is much lower than that. Unless you wish to include participation certificates obtained in some obscure middle school essay writing competition.
Unless you wish to include participation certificates obtained in some obscure middle school essay writing competition.
LOL... Appreciate ur sense of humour man! :))
Anyways, as you said both of us stand quite strong in our viewpoints! But again, opnions are subjective.
Let me tell u this... I've worked in one of those companies for 5 good years and perhaps a couple of years before, the number of certifications weren't too high. But these days, as you said ppl realize that it's dog-beat-dog competition and many of them clear basic certifications like SCJP at least by mugging question banks. At one point, SCJP actually started losing its lusture among our managers... This is the truth and not an opinion. So u can trust me on this one.
Anyways, an interesting argument! :) Enjoyed it...
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