bangalore
Employment in the Bangalore software industry
The software industry itself is not a big employer, especially by Indian standards. Approximations suggest that it currently employs between 7,000 and 15,000 people in Bangalore. As the number of software firms in Bangalore has been steadily increasing over the years, and as many firms have been growing rapidly, new jobs have been created every year. Both TISL and Infosys Technologies reported doubling their staff every year since they began operations. TISL now has about 1,000 employees, as does Infosys. Wipro employs about 1500 software professionals and another 150 support staff. Digital employs about 650. Siemens employs about 200 people in Bangalore. Other multinationals, TI and Motorola have a staff of between 200 and 300.
Jobs have also been created through the establishment of backward linkages. One example is the Business Partner Programme of TISL (the Tata-IBM joint venture). Fulfilling a commitment that TISL made to the Government of India, this programme is aimed at encouraging technical diffusion and producing opportunities for Indian companies to gain experience by undertaking projects that require meeting international standards. At any given time, there are a dozen companies involved. TISL outsources to these companies projects in which it does not have expertise or does not want to invest manpower in TISL evaluates and selects the companies based on a number of criteria including profitability. The standard of the companies has been fairly high until recently. It is becoming increasingly difficult, however, to find the quality and the range of experience in companies, perhaps reflecting the tightness of the labour market in this industry. Most firms in Bangalore, however, do not invest in backward linkages and outsourcing. The intense competition for clients as well as the fact that the clients are still mostly searching for low costs results in a perception that sharing and trust are a luxury that most firms cannot afford for fear of losing their clients (interviews).
The phenomenal growth of the industry both in terms of the number of firms and their profitability, particularly amongst the bigger, more established firms, has led to a surge in demand for qualified and experienced software professionals. Firms in Bangalore experience very high turnover rates as their best and more experienced personnel are "poached" by other firms in Bangalore or by American firms which recruit them when they are working on-site or through advertisements in Indian papers. Many also leave for higher education. Several firms in Bangalore have attrition rates between 20-30 per cent, much higher than the national average of 15-20 per cent. Some attribute this to the clustering of firms which makes poaching somewhat easier. Turnover is highest amongst those with 2-3 years of experience and those who have gained project management skills. Furthermore, the average stay of a software engineer with a firm in Bangalore is about 2 years.
Bangalore, which is in a State that boasts 9 universities, 51 engineering colleges, 169 polytechnics and 35 technical training institutes, produces a resource base of over 20,000 skilled, [next page]