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- By Jayan CM The rise of the Indian software industry as a dominant force in the global software outsourcing market has been one of the most remarkable success stories of the past 15 years. The industry has been able to achieve this market dominance in large measure by relying on Indias large pool of low-cost, highly qualified, technically proficient workforce.
But now it seems things are going back to square one, as most of these major companies are hiring aggressively in the United States, reversing the earlier trend when they always transferred Indians to work in America on temporary visas.
You may call it reverse-offshoring, but the fact remains that Indias largest offshoring firm Tata Consultancy Service Ltd (TCS) and software giants like Infosys and Wipro are among the IT firms which are re-employing American workers, who had been laid off in their country, after providing them training in India.
Wipro, for instance, is exploring US locations like Austin, Texas and Atlanta for two big software-writing centres that eventually could employ hundreds of programmers. These cities have the distinction of having deep tech-talent pools and reasonable salary costs.
According to Wipro Chairman Azim Premji "The work that Wipro is doing requires more and more knowledge of the customers businesses, and so they want local people to do that work.
Wipros has only 2.5 percent global workforce who are non-Indian, but the company now wants to enhance that to more than 10 percent in coming years. But Indian outsourcers say that their US expansion plans predate the latest concerns over immigration and jobs.
Tata Consultancy has about 1,000 employees who are US-based workers. And it plans to hire an additional 2,000 Americans within three years.
Most of the companies took a volte-face citing reason they had previously ignored. For example S Padmanabhan, human resources chief for Tata Consultancy Services Ltd (TCS), says "If TCS can hire close to their clients, they dont have to bring in somebody from India on an H-1B. Surprisingly, now these companies find it costly to bring in Indians on a temporary basis but rather hire Americans.
To some extend the onus cannot be put on to the companies for this reverse trend. The Indian rupee has risen more than 10 per cent against the dollar this year, so that make hiring an American cheaper. On the other hand, cutthroat competition for IT talent in India is pushing salaries up by 15 percent every year, although it remains less than a third of those in the US.
The bottom salaries are comparable, because Indian companies have to pay market rates for people they bring in on work visas. Besides the companies have to provide the Indian workers with housing facility, and the retirement benefits cost more because of Indias social security contribution requirements.
The Indian companies are recruiting a combination of fresh college graduates and experienced veterans who have worked at American companies. Theyre especially active at campus job fairs, and unlike a few years ago students know who these companies are and respect them.
In fact, the Indian connection has become a sort of attraction. Fresh graduates are thrilled on getting employed by Indian companies. A 23-year-old University graduates with a 2006-degree quote this to be a fantastic opportunity, and that he will be going abroad for training and then join TCS.
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