But there’s a big problem: demand for digital talent in India is far greater than its supply. In 2020, there were 390,000 openings for digital jobs and only 225,000 people ready to take them. By 2024, the figure could be close to 900,000 people.
This gap is bad for individual companies, and it is bad for India. Many of the world’s leading companies are making tech-related investments, drawn by India’s high-quality and relatively low-cost talent. In 2021 alone, venture capital firms invested almost $36 billion in Indian startups, compared to $10.7 billion in 2017. That growth won’t continue if the talent is not there.
Companies can’t wait, or assume, that the digital talent gap will be filled. They need to act. Here are six ways companies can prepare themselves.
Get off on the right foot: This starts even before recruitment, by designing a tech-oriented employee value proposition that offers clear career paths for digital colleagues such as DevOps and site reliability engineers. This means seeing talent as part of the brand, so that those being recruited can imagine themselves working there. Then comes identifying the right type of people for the organization and building a targeted approach to find them. Develop tools to create an efficient and candidate-friendly recruitment process that manages the candidate’s experience from the first interaction to Day One on the job. First impressions matter: if the pitch is unclear, it will be rejected.
Set up a talent ‘war room’: The search for talent is intense. It’s important, then, to set up a dedicated system, with support from top leadership, to attract, recruit and onboard digital talent. The war room defines functional skill-sets and tracks progress against targets, while defining new processes. It also builds digital talent capabilities through collaborations with relevant stakeholders, including compensation, legal and finance.
Build training programmes that are extensive, mandatory and focused: Retraining existing staff can be cost-effective—half as much as a new hire—and builds loyalty. (New hires are two to three times more likely to leave than longer-term employees.) The larger idea is to create a culture of learning, in which people share knowledge and best practices with their peers, and a culture of mentorship for experienced staff to help others grow.
Create a supportive, self-driven culture: For tech talent to thrive, give people the autonomy to work on discrete products—think more working and less ‘managing’. Keep the talent focused on building business innovations rather than chasing approvals, and get their feedback on a regular basis. Manage performance by using well-understood metrics, while providing opportunities for growth. The principle is to invest in tools for digital talent to feel empowered and ready to do interesting work that is related to their skills.
Focus on motivation: In the tech talent world, skill level is the coin of the realm. So, companies need to provide relevant professional development opportunities. This is a top issue for tech talent, according to McKinsey research. Businesses that do well in keeping their talent develop different experiences that can help people advance, and offer the freedom to experiment.
Invest in prevention: It is possible to create a ‘predictive attrition model’ to identify those at high risk of leaving. This model uses data drawn from across the employee lifecycle to identify patterns that enable companies to develop both individual scores and company-wide ‘hot spots’. On that basis, they can deploy specific interventions to persuade people to stay.
We believe talent will become the single most important factor in enabling tech-led business building. Clearly, there is a need for more and better education in general. But there are many matters within the control of companies. It is up to them to take responsibility for a well-thought-out talent strategy. Those who don’t will be at a competitive disadvantage, with unwelcome consequences to them, and to India.
Milan Mitra & Sathya Prathipati are, respectively, an expert associate partner in McKinsey & Company’s Bengaluru office and a senior partner in Mumbai.
