The winds of globalisation have unexpectedly shifted, starting off a trend in reverse, not only in off-shoring / outsourcing, but in who’s hiring who! Indian firms have become major players in the international arena, hiring aggressively in the United States and Europe, thereby, reversing the earlier trend of transferring Indians to work in America, on temporary visas.

Bennett Kalcevic’s saga offers ample testimony to the fact that the world order changeth. It was only yesterday that Indians were immigrating to US and Europe, in search of greener pastures, better job opportunities, a better life for themselves and their families. Today, Indian firms are offering equal employment opportunities to Americans and Europeans alike, not only in India, but wherever else they may call home.

Unemployment hit Kalcevic’s parents and many others in the mid-1980s, when cheap imports hit Pittsburgh’s steel industry, resulting in major job losses. That was then, this is now, when Kalcevic armed with a business degree from Michigan State University, has just landed a plum position with Infosys Technologies Ltd, one of many low-cost Indian outfits blamed for taking away the jobs of American software programmers. Even as, a six-month training stint in India sees Kalcevic returning to the US to write software for an Infosys customer.

This then, is how globalisation has turned off-shoring / outsourcing on its head, as it was not so long ago that low-end back-office work was sent to low cost India, but just a few years down the line, and Indians have proven themselves capable of much, much more. Indian firms are making acquisitions and setting up centres and facilities abroad, in a bid to combat the growing restlessness against off-shoring / outsourcing.

In the past, temporary work visas saw Indians transferred to US and Europe, however, in the present, there is a change in modus operandi, as Infosys, including other Indian firms are seen to be hiring aggressively, not only in the US, but elsewhere, as well. An off-shoring / outsourcing trend in reverse!

For instance, Wipro Ltd., one of India’s leading firms has been busy scouting US locations for the setting up of two big software development centres that will eventually, offer employment to hundreds of American programmers, each. And, towards this, it has short-listed Austin, Tex., and Atlanta, not only for their deep tech-talent pools, but also because their salary costs are much more reasonable, than other parts of US.

“The work we’re doing requires more and more knowledge of the customers’ businesses, and you want local people to do that,” says Chairman Azim H. Premji, Wipro, explaining the reverse trend in off-shoring / outsourcing. With only 2.5% of Wipro’s global workforce non-Indians, this Indian firm would like to boost the figure to more than 10%, in coming years.

And, it is not the latest immigration and job concerns that are pushing Indian firms to reverse the trend. Indian outsourcers say their U.S. expansion plans pre-date current local outsourcing worries. However, there is acknowledgement that the reverse trend could help ease tensions, as the Senate mulls regulations that require companies applying for H-1B visas i.e. temporary working papers for foreigners, to try and hire Americans first.

“If we can hire close to our clients, we don’t have to bring in somebody from India on an H-1B,” says S. Padmanabhan, Human Resources Chief for Tata Consultancy Services Ltd, India’s largest outsourcing firm. Currently, of TCS’s 10,000 US-based workforce, 1,000 are Americans (out of its 90,000-worldwide headcount), a figure TCS plans to raise by hiring an additional 2,000-Americans, within three years.

Surprisingly often, Indian firms find it cheaper to hire Americans than ship in Indians on a temporary basis. Base salaries are comparable, as the law demands Indian firms pay market rates for people brought in on work visas.

Not only do Indian firms have to provide Indians with housing, and retirement benefits, typically, they cost more, due to India’s social security contribution requirements. As well, the Indian rupee has risen more than 10% against the dollar, which makes hiring Americans cheaper.

Simultaneously, Indian salaries are being pushed up by 12% to 15% due to fierce competition for tech talent, although they remain less than a third of those in the US.

On Campus Allure
Especially, active at campus job fairs, Indian firms are recruiting a combination of fresh college grads and experienced vets, who have worked for American firms. And, unlike a few years back, American students have come to know the Indian firms and respect them. In fact, the Indian connection has become a fatal attraction.

“I thought this would be a fantastic opportunity, especially because they send you abroad for training,” says Brian Oswald, a 23-year-old Rutgers University graduate Tata Consultancy Services recruit, with a 2006 degree in industrial engineering.

By hiring Americans, Indian firms are echoing the strategy devised by Japan’s auto industry, soon after soaring import levels sparked-off a political outcry in Washington in December, 2000. “The Indians are doing to the world’s IT processes what the Japanese did to manufacturing,” says analyst John McCarthy of Forrester Research Inc.

And now, like the Japanese car makers before them, Indians are becoming major employers in the US, as well. Indian firms, who are major players in the international arena, are hiring aggressively in the United States and Europe in ‘reverse off-shoring’. A new report names India’s largest off-shoring firm Tata Consultancy Service Ltd (TCS) and software giants Infosys and Wipro among IT firms to have re-employed American workers, who had been laid off in their country, after training in India.

Case in point, Carol Borghesi, with an acclaimed 26-year career in customer care, including a senior position at British Telecom (BT), all factors which make her an attractive candidate for head-hunters scouting to fill senior positions across the globe. And, when India’s mobile carrier Bharti Airtel came calling, Borghesi (50), decided to leave a lucrative Managing Director role at BT to run Airtel’s customer service business.

“It’s a deliberate choice to be in India at this time, it’s a booming economy, and I wanted to be part of the action,” says Borghesi, a Canadian native, who since October, 2006, calls a plush apartment in Gurgaon, just outside New Delhi, home along with her husband and 11-year-old daughter.

These days, she is not the only senior executive to head to the sub-continent. She is at the vanguard of a trend that is sweeping the country, as fast-growing Indian firms eye Westerners for senior positions.

“Everybody wants to be part of the India growth story now,’ says Deepak Gupta, a Managing Director at Korn Ferry in New Delhi. And if, an executive search firm confirms, there are now around 1,000-foreigners holding senior positions in India, compared to 143 in 2005, and 2009 will only see that number double.

Only The Best
The attraction does not lie only in India’s position, alongside China, as an engine of global economic growth, it is also because, hiring practices among fast-expanding India firms are becoming increasingly global.

Govind Iyer, a Partner in Egon Zehnder, an international search firm, notes that half of senior management searches are targeting non-Indians. Two years ago, as per company requirements, 70% of the searches were for Non-Resident Indians, whom big companies saw as an easier option, often willing to accept pay cuts to be part of the Indian growth story, and who were more attuned to cultural differences.

What changed? For one thing, Indian firms, many of whom are making huge investments at home and abroad, are increasingly competing on a global scale and want the best person for the job.

Meanwhile, there are shortages of qualified managers in key areas such as infrastructure, aviation, retail, and life sciences. “India has good talent, but it’s not deep enough for some of the new sectors,” says Iyer.

The change of mindset shouldn’t be underestimated. Just three years ago, even as entry-level and mid-level Western hires were in vogue, companies rarely conceded they lacked expertise in senior management.

Not anymore. At Airtel, President & Chief Executive Officer Manoj Kohli says Borghesi is just what his firm requires. “Carol brings immense global experience,” he says. “Her culturally diverse background adds richness to our leadership team.”

Western-Style Salaries
India watchers also note a change in the types of executives that are relocating to India. Back in the 1990s, most senior level managers sent to India were charged with researching or establishing operations.

Often, notes Rama Bijapurkar, a Mumbai business consultant, those who went were either brand managers, sent to test the water in a newly liberalised India, or older executives on the verge of retirement. “Now it’s seriously different,” she says. “They are getting senior people with a clear mandate to grow the business.”

New recruits don’t come cheap. Most expect Western-sized salaries and perks, often including stock options. Head-hunters estimate that foreign salaries range from $300,000 to $600,000 including perks for senior positions. Contracts are typically for three to five years.

Yet, with India booming the disparities appears to engender relatively little unease among locally hired colleagues.

“Their compensation is justified for selective specialised functions,” says K.V. Subramaniam, CEO of Reliance, Life Sciences, a Mumbai-based biotech company. “They bring years of domain experience and are involved in developing competencies among Indian understudies.” Reliance has 15-expatriates, several of whom are in senior positions, and receive compensation three times that of their Indian counterparts.

Culture Adaptations
Of course India does hold special challenges. Bureaucracy, slow decision making, and cultural differences remain major headaches. Often, spouses of executives, especially those raising families, bear the brunt of the culture shock.

Lamon Rutten, Joint Managing Director of India’s Multi-Commodity Exchange, admits his family is still getting accustomed to living in India. Rutten, his wife, and two children relocated in June, 2006 to Juhu, a suburb of Mumbai, from the calm of Geneva, after he gave up a post as Chief of Finance and Risk Management in the commodities branch at the United Nations Conference on Trade and Development.

While, he enjoys the job, Rutten laments the lack of green space and the time it takes to get things repaired. “With India opening up, it has to adapt,” he says.

Business life can also throw up unusual problems. US native - Rudy Vercelli (47), Chief Operating Officer - Mumbai International Airport, is often mistaken for a tourist at the airport he is helping modernise. He also has to contend with the 80,000-squatters occupying 60% of the airport’s land. “We have 960-acres of airport land, but what we need is 4,000 acres. There is no room except on top,” he says.

Still, Vercelli, a former Bechtel Vice-President, has no regrets. “I will stay in India until they kick me out. My family looks upon every move as an adventure,” he says.

That is the present day scenario in the field of off-shoring / outsourcing, but what I would like to know is why a westerner is deemed to have greater expertise than an Indian, and why are they paid salaries three times that of their Indian colleagues. Isn’t it time, Indians woke up and smelt the coffee! They treat you like dirt in their own countries, but you hand everything to them on a platter at the cost of your own countrymen! There is always a glass ceiling for ‘people of colour’ or non-whites, yet, here are Indian firms putting whites on top of the heap to lord it over Indians, who are worth much more than they are given credit for!

When will we Indians rid ourselves of this colonial mindset, when will we realise Indians are on par if not better than a white import! I mean, hasn’t it struck home that having a white at the helm of affairs i.e. Sonia Gandhi as Chairman of the Congress Party, is not the best solution for the country. For the perceptive, no more needs to be said! One can only hope that better sense prevails, before much damage is done! Who wants to repeat history, the British East India Company and British Raj all over again! Uuuugh! Especially, when I do not think India has any one of the stature of a Bhagat Singh, a Sukdev or a Raj Guru! Especially, when Indians have become so besotted with all things western, they begin to deny the richness and depth of our traditions and ancient culture! When will they give up fawning and being obsequious to anyone who spots a white skin, even when that white skinned foreigner is a school dropout and comes from a blue collared background, even while they refuse to accord even common courtesy to one of their own countrymen!

I thought an improved Indian economy, Indians proving they could perform and out-perform on a global scale, would see a different perception prevail. Apparently, I was wrong as top positions; top salaries continue to go to white upstarts over fellow Indians! All I can say is, times are a changing and high time a confident India re-assesses the situation in an intelligent manner, instead of letting fellow Indians beaver away as cyber coolies, while white imports put on la-di-dah airs they couldn’t afford to back in their home countries, even while their employers happen to be Indian firms!

Offshore Outsourcing is so often stated responsible for the gloomy job market in the United States. Is outsourcing the sole reason for the job losses? Here is an objective look at the matter.

Every time a new, more advanced technology is introduced into any industry; there is always some form of retraining, reduction in scope, or redundancy. Why then has offshore outsourcing created so much uproar? Probably because of the scale and speed of change!

Comparative advantage! Yes, that what fuels offshore outsourcing. A benefit in cost, skill or speed provided by a country in comparison to other countries draws business from the United States and other western nations. In the 1980’s this transition began with the manufacturing industry, who in order to save labor costs continued to do their design, development and marketing work on their own while outsourcing their manufacturing operations. The same trend is being mirrored by the service industry. To stay in the competition and to stay afloat, downsizing/ laying off, cost cutting, investment in new technologies, process reengineering and outsourcing become necessary. In fact, these are the factors that drive outsourcing. Why then is outsourcing considered the prime culprit for the job losses?

More than outsourcing, it is productivity that is responsible for the current situation. The rising productivity in the US means a growing number of jobs which are to be accomplished by a fewer number of men. Labor costs are falling but capital costs are falling faster, and that makes it more advantageous to invest rather than to hire. The cost savings are invested in innovations or building a competitive edge. And, the fact that is not so often cited is that the United States imports far more jobs than it exports and has the best re-employment rate in the world.

Also, what is lacking today to cause this furor over outsourcing is probably the fact that in the current productivity boom there are no new and innovative industries that create jobs to replace those that are lost, like the car manufacturing industry in the 1920s, commercial aviation in the 1950s and 1960s and information technology in the 1990s. Currently, we are all waiting for the next big thing to happen, be it healthcare, pharma, biotech, energy — all of which can make a big impact.

Hence, the negative connotations of outsourcing will not really help in increasing the number of jobs in the US but they will definitely limit and restrict productivity. Moreover, there’s very little to show that outsourcing does in fact cause job loss in the US. On the contrary, a Boston University Professor examined the effect of outsourcing on large financial firms, and found that less than 20 per cent of workers affected by outsourcing lose their jobs; the rest are repositioned within the firms.

In the present scenario, sectors such as construction and health care are positioned to exploit the benefits of outsourcing to the fullest. The result will be a decrease in their cost of production, and improvement in quality and output.

Source: www.business-standard.com

Syntel Inc., an IT / BPO service firm has set up a new software development facility in Nandambakkam near Chennai.

Part of DLF’s IT SEZ Park, the new software development facility covers 80,000-sq. ft., with a 750-seating capacity.

Investing Rs. 8-crore in the new facility, IT services will be provided to Syntel’s global health, banking and insurance clients from it.

Catering to custom outsourcing needs of firms in banking, financial services, insurance, retail, healthcare and automotive sectors, currently, Syntel is in expansion mode, as it commences construction on a 29-acre SEZ facility at Sirusseri IT Park, where 9-lakh sq. ft. will be covered in the first phase at a cost of Rs. 235-crore.

US-based Sytel, with Rs. 1,200-crore worth of profits from last year alone, has more than 8,300-employees worldwide, and operations with operations in North America, Europe, Asia, and the Indian cities of Mumbai, Chennai and Pune.

Source:www.offshoringtimes.com

Offshoring in the financial services industry has happened much faster than anyone predicted with India accounting for four-fifths of the global market, a report has said.

A study based on global financial services institutions reads “That India holds around four-fifth of the global market. It is quite surprising that offshoring in financial services has developed so faster than expected.

The report says that India has been gaining market share from established centres such as Ireland, Canada and China. The closest contender appears to be the Philippines.

However, there are some doubts been raised from certain quarters weather India will be able to keep hold on this success trend, because it might complicate in future. The demand for skilled workers increases pressure on wages, will have an impact on India service providers.

The report predicted that by 2010, more than one-fifth of the overall industry cost base will have shifted offshore. The present numbers are astounding. In the year 2003 it recorded an increase of 46 per cent in the number of financial institutions with offshore operations, while the number of offshore jobs grew by 500 per cent.”

“This implies cost savings of more than $150 billion, a massive boon for the biggest firms, whose economies of scale tend to make them the predominant practitioners of offshoring.”

It is, of course, vital, said the report, that firms get offshoring right. Managers need to make the right offshoring decisions based on careful analysis of three main factors.

The second is to buy or build. In the early days of offshoring, many firms outsourced offshore capabilities. In other words, they bought them, just as they would buy any off-the-shelf product or service. Increasingly, however, firms now seek to build capabilities themselves, retaining ownership and control of a captive arrangement via a wholly-owned subsidiary, the report said.

Another model growing in popularity is build-operate-transfer (BOT), in which a hired vendor gets an offshore operation running smoothly before handing it over to the financial institution, it added.

The third factor is to decide to optimise now or later. Ambitious firms use the shift to offshoring as an opportunity to improve business practices and processes. But this can be risky. Many firms prefer to move their processes as they currently stand (a practice known as “shift and lift”), putting off the effort to make improvements until the transfer operation has been successfully completed.

“If they get these decisions right,” then firms should be well placed to harvest the fruits of offshoring.”

“Significant though these challenges are, however, “the potential gains make offshore one of the most compelling competitive forces in the history of the industry.

Source: Economic Times

iGATE Global Solutions, an integrated technology and operations firm, will be setting up a centre for organisation development and leadership on its Whitefield campus in Bangalore.

The iGATE Centre for Organisation Development and Leadership (iCODL) will create a human resource development, culture and climate; identify, develop and renew iGATE leadership competency framework; nurture behavioural competencies and be responsible for organisational diagnostics, surveys and change management.

Headed by Jaydeep Lal, a Fellow of Management from XLRI, Jamshedpur, and a leadership coach with over a decade of corporate experience in world class companies, his doctoral thesis is in the emerging area of positive psychology and employee well-being, and research interests include the areas of psycap (psychological capital), happiness, commitment, and leadership.

“We have reached the next phase of organisation development and require the right human resource pool. The iGATE Centre for organisation development and leadership will help us foster future leaders and introduce change management to take iGATE forward,” says Phaneesh Murthy, CEO, iGATE.

In Phase I, iCODL plans to launch a series of leadership development programmes targeted at middle and senior management. The programmes are designed to develop a leadership pipeline that will strengthen the iGATE growth story.