Shell World Online

Tapping into Asia's talent

With fewer science and engineering graduates in the West, some industrial companies face a shortage of technical talent. To fill the gap, firms increasingly compete for the best graduates from India’s technology institutes.

July 27, 2007
by CHRIS LOGAN

His mother cannot read or write. Teachers in his home village clubbed together to send him to college, where his talent for chemical engineering shone. Like many thousands of bright young students at India’s institutes of technology, Saravanan Venkatesan dreamt of a career with a major international company.

In the past that would have meant joining the 20 million Indians who live outside the country, many in well-paid jobs in Europe and the USA. But Saravanan’s timing was good: Western companies looking for promising technical talent are increasingly heading to India to tap into a vast pool of well-educated, ambitious people keen to carve out a future with some of the world’s biggest firms.

The son of a weaver from a rural village, Saravanan, 27, gained a PhD in chemical engineering last year from the Indian Institute of Technology in New Delhi. He was then taken on by Shell Technology India (STI) in Bangalore, one of around 200 graduates and experienced hires who make up the early recruits to the company’s newest technology centre.

Saravanan, who is now working on a biofuels research project in the Netherlands, is modest about his success: “Of course my family are very proud of me, but there are many talented young engineering graduates in India all looking for good careers, and there are a lot of companies competing for them.”

General Electric and IBM are among other major companies to have gone East and found that India, a country of 1.1 billion people, offers far more than perhaps less expensive labour. The computer giant even held its shareholders’ meeting last year in Bangalore, taking over a mock Windsor Castle-style palace for the event, usually held in New York.

India rising

It is not the brawn, but the brains that is the pull. India’s institutes of technology are turning out thousands of top-quality graduates each year who, like Saravanan, find themselves at the centre of what has been dubbed a war for talent. China, India’s great Asian economic rival, is also producing a lot of technical talent – half the world’s chemical engineering graduates in the next five years will be there. But, with the easing of foreign business controls and English widely spoken, India is the country which is capturing the attention of the multinationals in need of technical people.

Behind the drive for talent in India lies the dearth of such talent in the West. The nature of technical graduates in the traditional nurturing grounds – Europe, the USA, Australia – has changed. There are roughly as many technical graduates emerging from universities in these regions as ever, but fewer who go for industrial science or engineering. Instead, those who pursue a technical career tend to opt for information technology, banking, consultancy. Being a geophysicist, a petroleum engineer or a well engineer appears to have lost some of its sparkle for young people in the West.

In India the picture could not be more different. More than 400,000 graduates in science and engineering stream out of India’s universities each year. There are also many thousands of experienced Indian technical professionals returning home now that career opportunities and salaries are beginning to match what they have had in the West. One report last year said that 68% of Indian executives living in the USA were looking to return to their home country. B2B, or “Back to Bangalore” has become a trendy catchphrase in the city known as the technology hub of India.

The image of the country as a place where multinationals set up call centres and outsource manufacturing because of cheaper labour rates is also dying fast. India is no longer seen as “our back office”. This year, for the fourth year running, India will see the largest pay rises of any Asian country – an average 14.5%, according to a survey by global human resources firm Hewitt Associates. Some of this surge in salaries stems from the intense competition among major international companies for the young talent available. One Hewitt executive confirmed: “The war for talent is becoming increasingly fierce in India.”

Taking the war to campus

That war is being conducted through recruitment drives on the campuses of the technology institutes and in advertising campaigns aimed at attracting the best candidates, both graduates and those with several years’ experience. Shell, already pursuing a drive to grow its business in the East, carried out extensive investigations into several Asian countries before deciding that India was the place to set up what is expected to become its third major technology hub, on a par with centres in the USA and the Netherlands. It opened in September, 2006 in temporary premises which will give way to a purpose-built complex expected to be ready by 2010. Eventually the centre, currently housed in a six-storey building on the outskirts of the city, will be a base for 1,000 technical staff whose work will cover the exploration and production side of Shell – field development and enhanced oil recovery techniques, for example – to the refinery, chemicals and fuels end of the business, including biofuels. It is a team of technologists from both the upstream and downstream parts of the business, a unique combination in one location for Shell and a model which the company believes reinforces its integrated technology capabilities, a telling asset in competition for major oil and gas projects.

“We found that whenever we advertised for technical people whether in Malaysia, Vietnam or Singapore, for example, most of the applicants came from India,” said Ad de Visscher, Downstream Business Manager at STI. “There are more than 400 universities turning out technical graduates but we concentrated on the top 15. We feel as if we have only scratched the surface in terms of the talent available.”

In July and August of this year a further 175 graduates will be taken on, and the number of staff is expected to reach 500 by the end of 2007. Recruits are already being sent on overseas training assignments to the Netherlands, the USA, Qatar and Russia, among other places. Some are on long-term research projects but will return to Bangalore next year when research and development laboratories are expected to be available. Upstream recruits are engaged on a broad array of field development projects which Matthias Bichsel, Shell Executive Vice President, Technical believes will give newcomers to the industry especially “a solid grounding in the fundamentals of our business”.

“It isn’t about specialisation at this stage,” he said. “We want to give them a broad base of knowledge and experience.” On a recent visit to STI Bichsel was impressed by the “the drive, the energy, the ambition and the pride” of recruits.

“In view of the shift towards more difficult upstream projects, with oil and gas harder to extract and environments becoming more challenging, we need not only the more sophisticated technologies, but also the smart technical staff,” he added.

Technology excellence

Tom Hyde, STI Upstream Business Manager, said the number of petroleum engineers graduating from universities in Europe had fallen significantly. Yet, in common with other science and engineering-based companies, Shell stood to lose many of its senior technical people to retirement over the next five to 10 years.

“It seems in Europe the romance of science and engineering is simply not there any more,” he said. “The attraction of India for us was not only numbers but, more importantly, the quality of the talent. We’ve taken on people who are innovative and creative and can really contribute to the business.”

As President, Shell Global Solutions, Greg Lewin believes STI’s combination of upstream and downstream technologists will help Shell build on its reputation for technology excellence: “In the energy world we’re at a stage where we’re redefining what will be the future energy mix, and the role for the international oil companies like Shell is going to demand technology excellence. At STI we can show how we can get the best out of the technology synergies that exist between upstream and downstream, especially in view of the major integrated projects we are pursuing.”

What is clear is that Shell Technology India is seen as a crucial part of the company’s vision of how to tackle the challenge of helping to meet the world’s energy demands. It also puts Shell some way ahead of other energy multinationals in the war for talent. In a recent AC Nielsen survey of final year engineering students, Shell was the only energy company to make it into the top five most favoured multinational employers.

“What we are most definitely not is a back office,” said Bob Frith, STI President. “We’re in the front line of Shell’s business.”