With a global explosion in market opportunities in the IT sector, the shortage of manpower, both in quantity and quality is a prime challenge for HR professionals. The related issues are varied indeed: recruitment of world-class workforce and their retention, compensation and career planning, technological obsolescence and employee turnover.

The emergence of the Information Tecnology industry (henceforth referred to as software industry) over the 1990s, represents one of the most spectacular achievements for the Indian economy. The industry has grown at an incredible rate of 50% per annum in the past few years. It is highly export-oriented, has established India on the world map as an exporter of knowledge- intensive services, and has brought in a number of other spillover benefits such as creating employment and new pool of entrepreneurship talents. The evolution of India as an exporter of these knowledge-intensive services has also created much interest in the development community worldwide. Encouraged by the Indian success, a number of other developing countries are trying to emulate her in entering the industry. There are also questions on the sustainability of the high growth rates of Indian exports in view of emerging competition, growing scarcities of manpower in the sector, eroding cost advantage, the recent technology slowdown in the US and other markets of Indian software abroad.

Retention and motivation of personnel are major HR concerns today. People at Gartner group company, specializing in management of human capital in IT organizations, have observed that the average tenure for an IT professional in a company is less than three years. Further, the use of new technologies, the support of learning and training and a challenging work environment ranked higher than competitive pay structures as effective retention practices. Our own recent survey of 1,028 software professionals from 14 Indian software companies showed that while the professionals gave preference to personal and cultural job-fit, HR managers believed that the key to retention was salary and career satisfaction. Money was a prime motivator for `starters', but for those into their third or fourth jobs, their own value-addition to the organization was more important. Monetarily, offering `the best salaries in the industry' is the minimum every company is doing, apart from performance-based bonuses, long-service awards, and stock options. Many organizations frequently conduct employee satisfaction and organization climate surveys and are setting up Manpower Allocation Cells (MAC) to assign `the right project to the right person'. In fact, some organizations are even helping employees with their personal and domestic responsibilities to satisfy and motivate their workforce!

MBA Review Magazine, Indian Software Industry, HR Challenges, IT Sector, Information Tecnology Industry, Indian Economy, Human Capital, Manpower Allocation Cells, MAC, Software Productivity Centre Inc., SPC, non-IT Professional Sectors, Employee Development, HR Professionals, Decision-Making Process, Employee Skills, Human Resource Management, Employee Skills, Corporate Culture.