8 out of 10 Indian firms prefer reskilling to close IT skills gap

At a time when India’s information technology (IT) sector is facing acute skills gap and is struggling to hire and retain employees, a recent study by data centre and digital infrastructure firm, Equinix, said that eight out of Indian businesses are reskilling IT workers in response to the growing tech skills gap. 

The study shows that in response to skills shortages, many businesses are working hard to reskill human capital from other industries. Almost 86% of Indian IT leaders said that they reskill workers from similar industries, while 50% are trying to bolster their workforce with recruits from unrelated sectors. 

However, recruiting talent is still a challenge, said the study. So, with recent layoffs and furlough schemes driving workers to seek opportunities to level up their skills or careers, tech companies offering training and development opportunities could be better positioned to attract talent. 

According to the survey, there is a prominent tech skill gap for IT technicians (38%), followed by professionals with data protection skills (33%) and security software developer (30%). A higher percentage of IT decision-makers in India also identify a skills gap in data protection specialists (33%), as compared to the larger APAC region (24%), it said.  

While tech talent with coveted data protection, AI/ML and cloud computing skills are anticipated to be the most in-demand in India by 2025. Looking into the future, the study noted that IT decision makers in India anticipate that the biggest tech skills gap will lie in data protection (30%) in 2025, followed by AI/machine learning (29%), cloud computing (27%) and security administrator (26%). 

IT leaders also consider retention of current talent (43%), pay and compensation packages for employees (40%) and candidates with the wrong skill sets applying for jobs (40%) as the top three biggest skill challenges their businesses face. 

“The technology landscape in India is experiencing a war for talent. The survey shows that retention of current talent is reported as the biggest challenge for businesses along with compensation, underqualified applicant pools, need for reskilling for roles that change over time, and a lack of diversity,” said Manoj Paul, Managing Director, Equinix India. 

He added, “To address tech skill shortage, enterprises are also looking at outsourcing their IT requirement to cloud service providers, systems integrators and data center service providers like Equinix as other options for overcoming this challenge.” 

Not just the Equinix study that has identified skills gaps in the Indian tech sector. A report by industry body Nasscom, in collaboration with job portal Indeed and Aon, published earlier this month, observed similar trends. Highlighting the concerns of talent shortage in the tech sector, the study has noted that nearly two-thirds (65%) of IT companies in India are employing gig workers this year, a higher share compared to 57% of the organisations in 2020, in order to address shortage of tech talent. As per Nasscom, India’s tech talent pool stands at 3.8 million in FY2021, representing over 80% of the 4.7 million tech industry employee base.

Further an October 2022 study done by research firm International Data Corporation (IDC), noted that over 16.3% IT leaders in India cite skill shortage and 11% blames poor leadership and governance as key barriers to their IT or digital transformation goals, pointing towards the increased importance of upskilling and reskilling in niche tech roles.

The Equinix study too noted this trend, highlighting that the most common sources of reskilled workers are administration and business support (41%), people returning to work after a period of absence (34%), manufacturing (32%) and educational services (32%). These reskilled workers tend to help businesses bridge the tech skills gaps by working in cloud computing roles (57%), data protection (50%) and as IT technicians (46%). 

Good news is that Indian businesses are seeking to recruit through higher education and apprenticeship programs, said the study. IT leaders in India claim their companies’ main ways of partnering with higher education institutions include outsourcing their company training programs to higher education institutions (56%), offering student grants to those who will join after graduation (56%), offering student internships (53%) and running collaborative training programs with higher education institutions(49%), the study said.