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Why many small firms in India’s Silicon Valley are not hiring engineers

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Business Standard | Apurva Venkat  |  Bengaluru  July 3, 2016 |

India’s Silicon Valley has hundreds of small firms that do not hire engineers. Take CM Environmental Systems that makes equipment that allows firms as diverse as Apple to test for environmental conditions for its iPhone or iPads, and Hyundai, to simulate cars in real road conditions before it hits the streets.  Based in Bengaluru, this medium-sized firm exports these chambers to over 30 countries, helping global firms to ensure that their products meet stringent environmental standards in Europe and the US. It has a policy of not hiring engineers, after it saw massive attrition after they quit and joined large firms. Now, it relies only on diploma graduates, which it trains and retains for longer periods, to produce the equipment. “Earlier engineers were our first preference. However, now no more. They join small scale industries as they do not get jobs anywhere else. They work with us for a year or two and keeps looking for a bigger brand name (to shift),” says Jacob Crasta, founder chairman of CME Group. “Once the engineer quits, the company has to re-invest on training someone else.”

Rajamane and Hegde Service Private limited, a small enterprise which makes electric motors for global firms such as Bombardier, said no-hiring policy is not limited to one engineering branch such as computer science, but across the board. “You cannot force these engineers to stay back. So the best option is if one happens to hire an engineer also keep an ITI diploma holder as a second line for the engineer. This will make sure the work does not get affected,” says R N Hegde, managing director of Rajamane and Hegde, whose factory is in Whitefield, home to large firms such as SAP Labs, TCS and General Electric. “It is a phenomenon which is seen across the sector it is not exclusive to any one area.” “Almost all small scale companies face this problem. However, the problem gets aggravated in the cases that involve information technology components development or core engineering design-related jobs. Be it mechanical or be in electronics, the pattern is just the same. We had been employing engineers training them and losing them,” he says. For nearly two decades, India’s technology services firms have hired in thousands of fresh engineering graduates, train and deploy them on projects to meet requirements of global clients. There is now a global shift in business environment, with clients cutting down projects, shifting towards cloud to rent software instead of buying licenses and building IT infrastructure and adopting automation to do repeatable jobs. India’s IT services firms have reduced net hiring by as much as 30% anticipating this shift. Startups, backed by venture capital money which hired massively have fizzled out with hundreds of them downsizing their business or shutting them.

“A small scale company can never match the pay package of a multinational company. But even if we do, the employee does not want to stay back. They value a brand name more. Hence, we need to deal with the situation and make a policy no to hire them,” says G Raj Narayan, managing director of Radel Advanced Technology Pvt ltd, which makes equipment used in India’s military aircraft. “We would rather hire an ITI diploma holder, who can be trained very well.” Bhooshan CBM, director placements at the Acharya Institute of Technology, an engineering college says that the trend for engineering students is to work in multinational firms, even if they are just put on bench.  “In terms of engineering students, two kinds of hiring take place, one which is very specific and high skilled and the need of the presence of an engineer such as aerospace industry.  The second is multi-nationals who hire them just to put them on bench,” says Bhooshan. Software industry group Nasscom says that there is also reversal of trend in engineers who look to join smaller firms than large groups. “Today youngsters look for places where there is an opportunity to explore. Unlike bigger companies, the small companies give the young engineers a lot of flexibility, a flat structure and an opportunity to harness their innovative minds. This pulls youngsters to the smaller firms. The bigger firms have to alter themselves to suit the needs of the youngster and attract them,” said, Ashok Pamidi, regional head Karnataka, NASSCOM. –  Courtesy


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