India's Skilled Labor Supply: Myth or Reality?

Abstract

India is globally recognized as an attractive destination for offshoring because of its large and talented workforce. However, if current trends continue India is not likely to dominate the global skilled labor market, at least not for the next 20 years. Based on data from the UN Population Division and the International Labor Organization we project India's skilled workforce up to the year 2020. This study concludes that despite its large talent pool of skilled workers, India will have to work hard to meet the rapidly growing global demand for skilled labor. First, improvements to its educational system seem to have stalled. Second, a large proportion of its skilled women will not be participating in the workforce. Also, relatively high turnover rates, steep wage inflation and appreciation of the Indian rupee have erode the competitiveness of India's talent pool. An important challenge for employers is to devise ways to retain high performers and to attract the untapped pool of skilled Indian women.