Why India’s biggest startups recruit engineers from Silicon Valley

Where’s the talent?
Where’s the talent?
Image: Reuters/Sivaram V
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When internet giant Yahoo downsized its research and development team in India last year, several software product startups queued up to offer jobs to around 600 professionals who had received pink slips. Firms like Wingify, Zomato and InMobi went all out to lure these engineers, even approaching them through social networking websites.

While that was good news for most of these professionals, with great job offers within weeks of getting laid off, the incident highlighted how engineering talent for building software products is in short supply in the country. And this was reiterated last week by e-commerce company Snapdeal’s co-founder and chief operating officer Rohit Bansal, when he told The Wall Street Journal that India lacks quality engineers.

“If you think about the landscape in India, not too many product companies got built here,” he said.

Soon after, Flipkart’s co-founder and chief executive officer Sachin Bansal tweeted: “Don’t blame India for your failure to hire great engineers. They join for culture and challenge.”

But Sachin Bansal’s response has puzzled several in India’s tech industry, considering Flipkart itself has been hiring top talent from Silicon Valley in significant numbers.

Ravi Gururaj, chairman of Nasscom’s product council, described that his first reaction to what Snapdeal’s Bansal had said was: “Well what’s new?”

“Sounded to me like Snapdeal playing for some PR to help bolster their US recruiters working on hiring some top talent in Silicon Valley… mirroring the hiring Flipkart has done in a few instances recently. They also cribbed about how hard it was to hire great product talent locally,” Gururaj wrote in a post on Facebook on May 29.

In a blog post later, Snapdeal’s Rohit Bansal explained that “the internet industry in India has been very small until recently and hence the building of at-scale technology products out of India is a more recent phenomenon. In many other geographies around the world, the market has been much larger for a while and hence far more at scale products have been built out here.”

Kris Lakshmikanth, chairman of Headhunters India, a boutique executive search firm, agrees. “We have good engineers in India, but they do not have exposure to scale,” he told Quartz. “With incidents such as Flipkart’s website crashing during a sale, these companies now need experienced hands that can handle technology architecture at a much bigger scale.”

Bangalore-based Flipkart hosted its biggest ever one-day sale event, the ‘Big Billion Day’, on Oct. 6, 2014. While the company said it sold $100 million worth of goods and close to 1.5 million people made purchases on the day, the company faced backlash on social media after its website crashed several times during the sale.

Specialists required

For decades now, India has been known for its information technology services capabilities, far removed from the software products and platforms that the young startups are building.

For traditional IT companies in India, which are focused around services and consulting, talent requirements have been mainly focused on “generalists who can pitch on different technologies based on the customer project,” Manjunath Talwar, co-founder of online job portal Hiree.com told Quartz. “The new-age companies are looking for specialists in specific technologies/domain.”

Typically, between 80% and 90% of India’s technology graduates are absorbed by the traditional IT services companies every year. Although several global software product companies hire from Indian technology colleges, they visit only a select set of between 10 and 20 leading institutions and hire in small numbers.

And those engineers who were inclined towards software products have moved abroad over the last several decades.

The talent available at the R&D centres of several global software product companies in India is mostly focused around building only certain pieces of a software, and may not be the best at creating a product from scratch and scaling it.

Further, a survey in 2014 revealed that less than one out of four engineering graduates in India are employable. The National Employability Report, Engineering Graduates-2014, released by Aspiring Minds, a private employability solutions company, said that only 18.33% of the 6,00,000 engineers that graduate annually are employable, and only 18.09% actually get a job.

And the talent problem exists all the way up the leadership pipeline. “It’s only recently that India has seen these new internet companies, working on app-based businesses, etc. When we are looking for a tech leader for startups, the key is to find people who have been there and done that,” CK Guruprasad, principal with Heidrick & Struggles, a global executive search firm, told Quartz. “There aren’t enough such people in India. So, most of our clients ask us to scout for skills abroad also.”

We welcome your comments at ideas.india@qz.com.