India's tech graduates thwarted by ageing IT workforce

An older generation of IT workers who starred in India's last, great IT boom is the latest obstacle in a series of grim prognostications for recent Indian tech graduates.
Written by Rajiv Rao, Contributing Writer on

It turns out that 67-year-old Narayana Murthy's return to an embattled Infosys, the company he founded, was in some surreal way a foreshadowing of a larger trend taking place in the $108 billion IT services sector — that of an ageing 3 million-strong workforce.

According to this article, a little over a quarter of the 157,000 employees at Infosys, the second-largest IT services firm in India, were older than 30 in March last year, compared with 15 percent of its 91,000 staff members just four years earlier. Barclays, which was responsible for churning the numbers, says this trend is reflected even at rival TCS, where employees with more than three years of experience grew to 61 percent by the end of last March, from 50 percent five years earlier.

As the piece mentions, Bangalore-based IT services firms like Infosys and Wipro were built on the backs of young, relatively cheap and educated labour, creating a subculture that worked late and hard and partied harder.

That probably doesn't happen nearly as much since that young cohort has basically turned old, got married, and discovered life outside the office.

"Middle-aged or married couples prefer to go back home on time, so don't like to stay back at work till late or do weekends," said Megha Jain, 34, a Bangalore-based employee of an IT company in the Reuters article. "There is more focus by the company to fine tune policies around work from home and overtime."

Apparently, the average employee age at Infosys was 28 by March 2013, two years higher than it was four years earlier. What this has meant is a trend of rising costs, since having older workers means that it is now increasingly difficult to leverage the cost advantages of a younger crew who are not just cheaper, but also able to slog it out when necessary without complaining about quality-of-life issues.

Consequently, Barclays says that employee costs as a percentage of revenues increased by about 640 basis points over the 12 quarters through September as a result of poor demand forecasting and the rising age of employees.

This spells bad news for the hundreds of thousands of young people churned out of the system every year in India, who already face considerable challenges in the current job market, something that I wrote about here and here.

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