Shortage of skilled manpower in the information technology and business process outsourcing-ITeS sector is fuelling a hike in employee salaries, which have been posting a 10-40 per cent growth during the last couple of years, according to global research and advisory firm Gartner.
"While there is abundance of trainable human resources, a dearth in skilled manpower is being felt across the industry, from call centres to solution providers, and this has resulted in a hike in salaries," Gartner India Research & Advisory Services principal analyst (IT-services) Ravindra S Datar said.
Typically, salary jumps happen not just because of the conventional manner of being promoted but also because of professionals hopping jobs more frequently, he said. The increase in salaries varies from job to job, and ranks highest among call centre employees, who get a hike of over 40 per cent when they join a new establishment, he added.
There is no dearth in entry-level human resources as there is a larger supply, but a severe shortage is felt in the middle-level positions.
A trained junior level professional gets around 25-40 per cent hike in salary in a new job. However, at the middle level position, owing to a higher base of salary to compare with, the percentage change in salaries is lower at around 15-25 per cent, he added.
Other benefits like higher position, responsibilities, better perquisites are the drivers for shifting of jobs in the middle-level positions, Datar said.
According to Datar, many new captive and third party offshore facilities being set up in the country have led to a competition for skilled human resources that are already scarce in availability.
This is also leading to an ever widening demand-supply gap and rise in average salary levels for all positions, apart from pushing up attrition in existing facilities, he said.
A dearth in manpower is being felt in call centre and BPO operations, software and services sector and maintenance and support services among others, he said.
A new trend of employees moving from Indian companies to multinational companies abroad for higher salaries and global experience and returning back to Indian firms, but for a higher pay and position, is also emerging, he added.
This leads to local vendors getting access to professionals trained on global best practices, while the increase in salary levels is pushing up costs and putting pressure on margins.
The constant churn of human resources also pushes up training costs and may affect quality of output, he opined.
A higher churn in human resources, especially if it is visible at the middle and senior levels, also causes apprehension amongst clients about the security and privacy of their information and about the ability of the service providers to maintain the quality of work.
"There is an urgent need to find a long-term solution to this challenge, by way of ensuring sustainable flow of large numbers adequately trained human resources. One of the ways to do this is to ramp up the educational infrastructure through joint industry-government initiatives" added Datar.