Building showpiece campuses the size of many U.S. colleges is just one way big Indian employers are battling to hold on to budding engineers, designers, and finance specialists. Not long ago, India's skilled labor supply seemed limitless. Today, companies face high turnover, escalating salaries, and shortages of qualified workers and managers. Less than a quarter of companies surveyed in 2006 in India by McKinsey & Co. said they were meeting recruiting needs. By 2010, McKinsey predicts, India will face a shortfall of 500,000 staff capable of doing work for multinationals.
The scale of the human-resources challenge is dizzying. Six years ago, for example, Accenture Ltd. (ACN
) had 250 workers in India. By this fall, it expects to reach 35,000. To keep staffers happy, Accenture assigns each a career counselor and offers some 10,000 online courses, from languages to Harvard Business School classes. "People here are driven," says Rahul Varma, Accenture's senior human resources director in India.
Satisfying high career expectations can be tough. Just a few years ago, IBM (IBM
), Microsoft (MSFT
), Hewlett-Packard (HPQ
), and Coca-Cola (KO
) could lure all the top Indian grads they needed on the strength of their names. "Now multinationals are losing talent because they made false promises about careers," says Soumen Basu, who heads Manpower's (MAN
) India office. Some companies have grown so fast that it's common to find 25-year-olds managing 23-year-olds who are managing 21-year-olds. But as India's tech services industry matures, such rapid advancement can't be guaranteed.
So companies look for creative ways to satisfy ambitions. Hyderabad-based Satyam Computer Services Ltd. (SAY
) has grown from 9,000 to 42,000 workers in four years while annual sales have more than tripled, to $1.46 billion. Satyam has created 1,773 business units, many with modest sales. Each is headed by its own chief executive, who bears responsibility for boosting productivity, reducing costs, and fostering innovation.
That means a lot to engineers such as Karthikeyan Natarajan, 32, who joined Satyam in 2003. Now he heads a 20-person group designing kitchen appliances and aerospace components. His office is adorned with certificates showing he has completed international programs in skills such as quality control and global leadership. He says he is often approached by big U.S. info tech companies, but thinks he's better off at Satyam. "I could double or triple my salary in no time," Natarajan says. "But I could make that jump and stop learning. I don't want to be in a comfort zone."
Perhaps the cheapest way for companies to cultivate loyalty is to build ties with employees' families. Satyam and others encourage parents to visit the workplace. When a worker gets recognized, Satyam calls or sends letters of thanks to the parents. "If U.S. parents received a phone call saying their kid is doing well, they would be shocked," says Ed Cohen, a Booz Allen Hamilton vet who now runs Satyam's leadership school. "Here, it goes a long way to locking people into a firm." In the escalating war for Indian brainpower, any edge can be important. By Pete Engardio