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Digital India and the ever-growing talent gap

November 25, 2020 | BY Pramod Dhore

Digital India and the ever-growing talent gap

India has always been one of the fastest adopters of evolutionary technologies and that has spurred exponential growth in the last few decades. Indian IT sector now contributes to nearly 8% of the country’s GDP and is one of the largest tech talent providers in the world.

In recent years, India has seen an incredible rise in adoption of digital technologies like Big Data, Cloud, Machine Learning, IoT, AI, etc., in concert with encouraging support by the Government with its vision for Digital India to explore the full economic potential of these and new emerging data & digital technologies. 

But as the country fast accelerates the digital adoption across industries, it is stumbling upon the biggest roadblock and that is the lack of adequate supply of expert tech talent to execute data & digital initiatives. 

Tech education is changing, but not fast enough 

The India Skills Report 2020 observes that only 46% of the survey participants were job-ready, with the overall state of employability remaining much the same as the earlier years.  

The pace at which new technologies are emerging and converging is exponential in nature, reducing the time between emergence, adoption, and deployment. This is posing a significant challenge for the tech education system in India to accommodate new skills and expertise matching the expectations. 

Despite having one of the largest and youngest tech-savvy talent populations in the world, there is still a need for Indian tech institutions to match the pace of tech adoption with dynamic and intensive skilling approaches, advanced learning techniques, and agile reskilling support on a larger scale. 

Indian businesses are transforming fast

India is expected to grow exponentially by leveraging new data & digital technologies with some high targets being set ($5T economy). Sectors like Banking & Finance, Insurance, e-Commerce, Telecom, Retail, and Healthcare are leading the way with other sectors closely following the lead with the adoption of niche tech solutions. Digital startups are emerging and thriving with their agility by birth, altering the market dynamics by eliminating monolithic business practices and promoting efficient products and services. 

All these rapid transformations are revealing new, complex challenges and vulnerabilities that demand new technology skillsets and expertise that can deliver value. The race to attract the top talent is getting fierce, with the tale of recruiters scrambling to find candidates skilled in niche technologies becoming increasingly common nowadays.

There is a glaring gap between demand and supply of talent 

We have identified some key influencing factors that govern the glaring mismatch between demand and supply of skilled talent in the Indian technology landscape:

  • Lack of skilled talent in Big Data, ML, AI, Cybersecurity, Cloud & Digital 
    Despite having one of the world’s largest workforces, India faces a severe lack of skilled and experienced talent in knowledge-intensive data & digital technologies for its own growth and those that are relatively recent and frequently updating.  
  • Not enough reskilling initiatives  
    While traditional markets need a mix of legacy and latest skills to maintain their current systems, India has leapfrogged ahead, creating the demand for latest technology skills. This demand is significantly higher than for legacy skills, causing a huge demand gap which isn’t being bridged as actively as it should. 
  • Shortage of India-driven tech workforce 
    Since the 90s, India has provided the world with technical talent on a huge scale. The outsourcing of skilled local workforce overseas is leading to a shortage of India-focused tech talent as well as solutions. The majority of skilled Indian IT talent is occupied in overseas projects whereas Indian businesses are finding it hard to attract and retain the niche talent.

The role of skilled talent and tech-savvy culture in driving transformation 

According to the latest report by BCG, only 30% of Digital Transformation initiatives reach their target value and the lack of skilled talent deployment is one of the key factors that impact the transformation journey. 

Digital transformation is becoming the norm and for compelling reasons. Indian businesses are fast adopting new niche technologies to respond to changing consumer behaviors and volatile markets with agility and resilience. While the vision is certainly in the right direction, the success is largely determined by efficient execution driven by expert talent well-versed in industry best practices. 

Also, these transformation initiatives are exposing existing business vulnerabilities in terms of data, cybersecurity, and advanced threat detection. This is highlighting the need for a skilled technical workforce and a cohesive, collaborative tech-savvy culture across the organization that emphasizes the importance of tech-savviness and leverages it to drive successful transformations. 

The outdated hiring practices are worsening the situation 

Despite the fierce race to attract the best, skilled talent, many organizations are failing due to outdated hiring practices and the inability to find the pulse of the newer Gen Y and Gen Z candidates.  

There is a drastic need to rethink incentives to hire young candidates who are prioritizing meaningful and value-adding work, non-toxic organizational culture, better work-life balance, and flexible routines over other perks and sometimes even over attractive monetary compensation. 

The hiring practices need to evolve to fill the big gap between skilled talent demand and supply with the right talent acquisition strategies followed by vigorous training programs that promote employee upskilling and reskilling. 

The talent crunch is putting brakes on democratization of digital technology

The importance of digital tech adoption has been well-translated across private and public sectors in India. But the high costs of skilled talent and scarcity of the same are negatively impacting the vision and causing uneven adoption amongst the top, middle, and bottom players of each industry. The leading top players are able to bear growing transformation costs due to scarce talent in niche technologies whereas the adoption rates are reducing from middle to bottom. 

This is slowing down industry-wide tech adoption and innovation, losing on vital value creation opportunities offered by new evolutionary technologies. 

What makes expert talent so vital for successful transformation  

The key reasons that make expert talent the most vital factor during the digital transformation journey are as follows: 

  • To align the transformation vision with a proper assessment of risks involved 
  • To add agility and efficiency to execution
  • To ensure timely completion of set goals 
  • To promote innovation 
  • To get the best out of knowledge-intensive technologies 
  • To maximize the value of transformation initiatives 

Having expert talent at your disposal not only solves your technical needs but also better enables you to unlock new opportunities as the business undergoes digital transformation. 

Post-COVID need for agility requires scaling data & digital skills 

The COVID-19 crisis removed any hesitation Indian businesses may have had in terms of going agile by leveraging digital technologies. It changed how organizations will work in the future, gave a boost to collaborative technology tools, and most of all, it brought back the focus on where it always should have been: On people who drive transformations. 

Numerous surveys have established that there is a direct correlation between the skill shortage and the unrealized value potential of the business. It will determine how efficiently Indian businesses will adopt digital technologies to increase preparedness, build resilience, and enhance agility.  

As the markets reopen and hiring begins, there is an additional aspect that businesses need to focus on, i.e., scaling critical data & digital skills across the enterprise with a renewed focus on upskilling and reskilling the employees. 

Going forward, Indian businesses can choose to opt for hiring technology consulting firms to drive their transformations or developing internal tech talent to suit their long-term objectives. But in any case, a steady focus on bridging the gaps of expert talent is of paramount importance for them to grow in the rapidly evolving digital landscape in India.

Pramod Dhore


Specialised in Global Delivery, Thought Leadership, Change Management, Product Delivery.

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