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IT giants increase overseas hiring

By S Shinde, K Pathak & S Sabharwal in Mumbai
August 13, 2007 16:12 IST
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Indian information technology firms continue to be accused of misusing H1B and L1 visas and depriving the US youth of employment opportunities. However, these very IT firms are increasingly hiring locals from foreign countries.

The non-Indian workforce comprised 9.6 per cent of the IT majors' total workforce in 2006-07, and the number is set to rise.

Wipro Technologies, for instance, hired over 200 college/ business school graduates from the US and Europe in 2006-07. This is a 150 per cent rise in the recruitment of locals in their overseas operations over the previous year 2005-'06. Tata Consultancy Services, on the other hand, as its long-term strategy is looking at having 15-20 per cent of their workforce from foreign countries.

Infosys Technologies, during its first quarter results for financial year 2007-08, said: "Outside employment could shoot up by 25 per cent in future."

Infosys already has 3 per cent of its workforce made up of foreign nationals, and has seen their numbers grow 28 per cent from fiscal '05-'06 to '06-'07.

Kiran Karnik, president, Nasscom, says: "The trend certainly shows a maturity among the Indian IT companies. As you do higher degree of sophisticated work, you are not just looking at technology solutions but business solutions. And then you need people to understand the context of the problem, which might be easy for a local to know."

The companies recruit foreign students for their foreign offices. With these IT majors on an acquisition spree, the need for such recruits is only rising. "We recruit students from management schools and engineers from countries like Romania, Mexico, Germany and Austria. Most recruits are for our foreign operations," says Achuthan Nair, VP, resourcing, Wipro Technologies.

The trend however, has picked up pace in European countries than in the US. For instance, HCL Technologies North Ireland operations is run by local people and the operations have grown rapidly with a headcount of 1,670.

Similarly, Tech Mahindra recently announced the setting up of centre of excellence for business services delivery in Belfast, North Ireland. The centre will hire close to 200 locals in the coming years.

Infosys, through its Global Talent Programme recruited 126 students from 82 American colleges in 2006-07 including the Massachusetts Institute of Technology, University of California, Columbia University among others. The company has extended the programme to the UK as a pilot programme in 2007.

TCS, on the other hand, is concentrating on Asia, Europe and the US. The company has global relationships with seven colleges in the Asia-Pacific region, six in Brazil, 9 in Europe, 7 in the UK and 24 in the USA and Canada.

These institutes include London School of Business, Nanyang Technological University, and Carnegie Mellon University.

The growth, however, might not be high when compared with what multinationals like IBM, Accenture and Cisco are doing in India. For instance, IBM has around 53,000 people in India. Accenture has close to 30,000 employees and France-based Capgemini plans to touch 40,000 by 2010.

But there's a difference, note analysts. The Indian IT giants are hiring in countries, which might not give them cost-arbitrage. For the global players, on the other hand, India is a low-cost delivery centre. And any addition of employees will always give them the cost advantage.

Whereas, when Indian IT giants hire they are paying according to the salary levels existing there. The salary difference, say analysts, is anywhere in the ratio of 1:8. Salaries in US and other developed market will obviously be more, said another analyst, on condition of anonymity.

However, Siddarth Pai, partner, TPI, opines: "The top Indian players are not growing their international hiring at the required pace." While salaries for international recruits in the IT space has increased 3-5 per cent for '07-'08, hiring locals could still be cheaper than sending Indians abroad. Besides, it's just not the salary that the company has to pay when they send Indians abroad. There are issues like insurance, family expenses and other expenditures, which add up.

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S Shinde, K Pathak & S Sabharwal in Mumbai
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