Why India is Running Out of Skilled Engineers

Engineering and R&D-focused (ER&D) companies are grappling with a growing talent crisis. A recent report by Bain & Company reveals that 73% of these firms are already experiencing significant talent gaps—a challenge that’s expected to intensify as baby boomers retire at a pace that leaves behind the arrival of new graduates who can replace them. 

Quess reported that between March 2024 and March 2025, hiring demand for AI and data professionals grew by an estimated 38% to 45%. 

India has an AI talent pool of 4.16 lakh professionals, but reports indicate a 51% demand-supply gap. This imbalance highlights the urgent need to invest in building future-ready capabilities.

As per data shared by Neeti Sharma, CEO of TeamLease Digital, with AIM, product companies increasingly require deep technical expertise in areas like artificial intelligence (AI), machine learning (ML), natural language processing (NLP), and other advanced domains.

Rajesh Bharatiya, CEO of Peoplefy, told AIM, “Product engineering, where engineers build scalable software for thousands of users across various clients, requires strong technical skills that often allow professionals with seven to eight years of experience to excel as individual contributors (ICs). However, the common Indian mindset that equates career progression with managerial titles makes it difficult to find experienced product engineers who are willing to remain in these valuable IC roles.”

Compounding the challenge, many midcareer engineers are shifting into nonengineering roles, further shrinking the pool of experienced technical professionals.

Sharma further noted that many skilled engineers prefer a managerial role to a technical role due to higher salaries, broader exposure and a better growth trajectory. Roles emphasising soft skills, like leadership, negotiation, and strategy, tend to offer greater visibility and are better rewarded. This puts startups and mid-sized product companies at a disadvantage, as they struggle to match the pay and benefits provided by global tech giants and multinational corporations.

To make matters worse, younger professionals are also contributing to the turnover challenge. The Bain survey revealed that nearly 40% of early-career engineers globally are likely to switch jobs within the next six months.

“In today’s Indian job market, we’ve observed that many core engineers aspire to move into managerial roles rather quickly. They often see managerial positions within the broader IT sector as more appealing and potentially offering better compensation,” Sarbojit Mallick, co-founder at Instahyre, commented.

Mallick believes that this preference, combined with a perception that core engineering roles might be less financially rewarding or exciting in the long run, contributes to a scarcity of qualified engineers who are willing to remain in purely technical positions for an extended period.

Speaking to AIM, Gautam Goenka, VP of engineering at UiPath, admitted that “hiring is a challenge”, particularly for a product-focused company like theirs.

Goenka added that core engineering tasks make hiring even more difficult. “You don’t get that talent easily.” While entry-level recruitment poses fewer challenges, the difficulty rises significantly at senior levels.

The UiPath platform accelerates the shift toward a new era of agentic automation—one in which agents, robots, people, and models integrate to drive autonomy and smarter decision-making.

As a product company deeply involved in core engineering tasks, UiPath expects its engineers to have seven to eight years of experience before getting into a manager role, Goenka said.

During this period, the company prefers individuals to focus on deep technical work.

“[In India], there is a tendency…for people to become non-technical, going to management paths very quickly.”

In fact, a recent trend indicates that many engineers are drawn to tech companies, where career progression tends to be faster—promotions often occur every one to two years. 

In contrast, engineers at traditional engineering or industrial firms may have to wait up to five years for similar advancement opportunities.

Moreover, as new AI-based roles emerge, many ER&D companies have begun categorising employees’ skills as either mainstream or premium.

Goenka further explained that engineers often start looking for managerial roles as early as three to four years into their careers, which creates a mismatch for their technical needs. While these candidates may excel in managerial tasks, they “struggle with the technical stuff”.

UiPath has been in this space for around 10 years with approximately 10,750 employees worldwide and a community of three million developers.

Human vs AI

With the growing adoption of AI tools to support coding, the roles and responsibilities of developers are poised to expand significantly.

Goenka shared his perspective on coding agents, stating, “The place where I have seen coding agents work very well is this space where we are doing some experimentations.”

He added that AI is not yet at a stage where it can fully replace developers.

He pointed out how new responsibilities emerge with the rise of AI and agent-based systems. Skills like prompt engineering, system understanding, and strong domain knowledge are becoming increasingly critical to building effective AI agents.

Meanwhile, developers have started realising as well. As one Reddit user mentioned, building an AI agent is not solely about coding.

Recently, the company unveiled UiPath Maestro—the new orchestration layer at the heart of the platform. 

Previously, automation focused on deterministic steps, leaving humans to handle the probabilistic parts, like interpreting policies for approval or rejection. Now, with these latest advancements, bots can handle the deterministic steps, while AI agents manage the probabilistic steps.

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