NEW DELHI: The Indian IT sector is facing the heat. And giving them a run for their money are top MNCs who are on a recruitment spree, leading to attrition problems among Indian companies.

The pressure is on two fronts — skilled manpower and pricing. IBM, for example, opened its fifth global delivery centre in India in June, while Accenture hired 1,600 employees in May. In fact, Accenture’s Indian employee base now accounts for over 10% of its global workforce.

Over the next three years, the company plans to add 30,000-50,000 people in India, China and Philippines, says William D Green, CEO.

Holding on to skilled manpower is therefore an uphill task for Indian players, say experts. "Most have been steadily losing employees. Infosys lost nearly 1,400 employees in the quarter ending June," says an industry expert. And with MNCs becoming more aggressive about their India plans, the problem will aggravate. But most Indian firms are in denial mode.

Harjeet Aulakh, Alps Management Consultant, says: "Many Indian companies may not be giving the exact picture due to stock market compulsions."

Wipro and Infosys, while announcing their first quarter results recently, said that despite heavy hiring by MNCs and Indian IT providers, attrition rates had actually "gone down".

MNCs are able to attract the best talent, says Pradeep Udhas, ED, KPMG, because of better pay packets and global working conditions. Nasscom’s Sunil Mehta however says the situation may not be that bad.

"Look at it this way — both are trying to climb the same mountain from different directions. The good thing is, it’s creating more jobs in India."

This has led to salary hikes here and increased expenditure on recruitment and training. A study by NeoIT found that IT salaries in India experienced the most significant growth compared to other offshore/near shore destinations in 2004. The trend is expected to be repeated in 2005. "The shuffling has resulted in talented manpower being recruited by both the MNCs and Indian majors. This may not have been the case earlier," says Roopesh Shah, MaFoi, a global HR consulting firm.