Retention becoming a major issue

As the Indian IT Industry gains further momentum and comes closer to achieving its goal of US $50 billion the stakes are becoming high for the small and medium sized companies who are now finding it increasingly difficult to retain trained staff. As is evident from the statistics revealed by Nasscom, the IT industry body in India, the top 10 software companies are growing much faster than the rest and the number of professionals being added to their teams, every quarter, is phenomenal. Where are these people coming from? Whereas some are off course from the IITs, RECs and other training institutes, however, a significant portion are being poached from the smaller companies by promising better projects and a higher salary.

 

Just the other day I was in a meeting with the promoter of one such company, having around 200 employees across the world, who related an experience which corroborates this viewpoint. He had appointed a software engineer who was earlier drawing Rs 4 lacs per annum at a salary of Rs 6lacs. Within 15 days the employee was back saying that he had got an offer from one of the top 10 companies for Rs 8.5 lac per annum and he would be taking up the offer immediately. The Brand as well as the Salary offered by the Top 10 company won the day. How is the smaller company, as well as all the other such companies in the industry, supposed to tackle such situations?

 

Are we headed for a situation where most of the offshore work will consolidate behind the top companies and the smaller ones will either be bought out or close? OR is the Supply side going to change significantly in the near future to take care of this problem ?