India's AI Talent Dilemma: High Demand, High Expectations Companies are struggling to keep up with the rising salary expectations of AI professionals
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India's remarkable growth in the Artificial Intelligence (AI) market has been widely attributed to its young talent pool. However, this very asset is now presenting challenges for companies in various sectors, including technology, manufacturing, and finance.
A recent survey by US-based payroll firm Deel has revealed that some companies are struggling to keep up with the rising salary expectations of AI professionals, making it difficult to attract the right talent—out of 250 organizations,165 identified high salary demands as a major hurdle in the recruitment process. Notably, 132 of these companies represent 80 per cent—are focused exclusively on hiring in India, underscoring the country's significant role in the global AI pool.
"While the demand for AI expertise is rising, locating candidates with the right skill set remains a significant challenge," said Mark Samlal, Asia-Pacific General Manager, Deel. His comments underscored the concerns of industry leaders who are grappling with the difficulties of balancing the need for top-tier talent with the realities of budget constraints.
Additionally, more than half of the organizations are open to global hiring, reflecting a broader trend of companies casting a wider net to find the expertise they need. However, this global trend brings its own set of challenges, particularly in managing diverse teams across different regions. Over half of the HR professionals surveyed reported using six or more technological tools to manage their companies' HR needs.
Financial habits of Indian workers
Deel facilitates hiring and payment processes for businesses employing international workers and contractors observed interesting trends in the financial habits of Indian workers. Last month, the company released payroll data analysis showing an 11 per cent increase in contractor dollar withdrawals since May 2023. This trend is part of a broader global shift, with a surge in demand for payment in US dollars, particularly among contractors in countries like Argentina, the UAE, Turkey, Georgia, and India.
Samlal attributed the rise in dollar withdrawals by Indian contractors to favorable exchange rates, allowing them to maximize their earnings. He also pointed to India's growing middle class and a younger generation eager to explore the world, many of whom are traveling to the United States. India is the fifth-largest source of tourists to the US.
India— a significant player in the AI sector
Meanwhile, India has been positioned as a significant player in several AI sectors including advanced data analytics, hardware accelerators, AI algorithms, machine learning, natural language processing, integrated circuit design and fabrication, and adversarial AI, just behind the US and China. This marks a substantial improvement from the 2003-2007 period when India was only mastered in four technologies, according to the Australian Strategic Policy Institute's Critical Technology Tracker report.
Nevertheless, India has not touched its AI golden age yet. A lot of work in India needs to be done, especially in producing the right workforce for Indian organizations. For instance, Indian large and small enterprises need skilled AI talent that can contribute to the growth of Indian companies and take them to the global market. Additionally, Indian universities also need to provide the right skills to students that are useful in practical business settings.
