Outsourcing Frontier: Yanks Need Apply

Indian companies that ''need some people with a more global, broader view'' have started to import workers from a new source of talent: the United ...
John P. Mello Jr.February 7, 2006

Not content with siphoning jobs from the United States, India has started cherry-picking its worker pool, too. The market for expatriates in India has heated up appreciably in the last three months or so, says Art Flew, CEO of Hyderabad-based business process outsourcing company Karvy Global Services.

In a shift from recent practice, companies on the subcontinent are no longer seeking expatriates only for high-level positions, asserts Flew; they’re starting to expand their business outlook with experienced managers from the expat community. “As they look more at global interactions, they need some people with a more global, broader view,” he contends. “They have the kind of management capabilities that we need to build more of here in India.”

Atul Vashistha, CEO of NeoIT, an offshoring consulting firm in San Ramon, California, also sees Indian firms hiring Americans as project, relationship, business, and account managers for their domestic and U.S. operations. “That market is growing very strongly,” says Vashistha. The complexity of the work is increasing, he adds, and since more-complex work is more likely to be done on-site than off-site, Indian outsourcers are increasingly looking for American-born college graduates to work in the States.

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Yanks are eyeing careers on the subcontinent, too. “I’ve been amazed by the number of American and British applicants that we receive for our consulting positions in India,” says Vashistha. He acknowledges that there’s a big gap between stateside compensation and the pay at 90 percent of the jobs with Indian companies, but he adds that the discrepancies are narrowing for senior and certain midlevel positions. For vice presidents and above, for example, compensation is in the $100,000 to $150,000 range.

On the other hand, housing prices can be steep, especially in top-tier cities like Bangalore and Bombay. “I was in a neighborhood called Palm Meadows in Bangalore last week, where lots of expats and senior managers live, and the homes there ranged from $400,000 to over $1 million,” Vashistha recalls.

Hiring Americans reduces some of the competitive advantage that Indian outsourcing companies garner through labor arbitrage, says Vashistha. He maintains, however, that these companies are willing to give up that advantage in the short term to obtain the kind of complex work they need to grow their businesses. As their offshoring resources mature in the next two years or so, he adds, Indian companies believe they’ll be able to bring that complex business back to India.

Some observers doubt just how successful Indian companies like Tata, Wipro, Infosys, and Cognizant can be with this latest recruitment effort. “They’re playing politics to look like global firms,” declares Ron Hira, an assistant professor of public policy at the Rochester Institute of Technology and a vice president of the Institute of Electrical and Electronics Engineers. “It remains to be seen how many Americans they are going to hire. My guess is it won’t be a lot.”

Indian companies will find it so difficult, according to Hira — also the co-author of Outsourcing America: What’s Behind Our National Crisis and How We Can Reclaim American Jobs — because “their business model isn’t built on this. Their business model is built on bringing in low-cost foreign workers here plus the advantage of having offshore labor, which is less expensive.”