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Banda
Pilla Bewarse
Username: Banda
Post Number: 30
Registered: 11-2004
Posted From: 172.188.147.66
Rating:N/A
Votes: 0(Vote!) | | Posted on Thursday, November 18, 2004 - 6:02 pm: |    |
now it started picking up |
Billa_pichodu
Kurra Bewarse
Username: Billa_pichodu
Post Number: 259
Registered: 04-2004
Posted From: 195.47.45.58
Rating:N/A
Votes: 0(Vote!) | | Posted on Tuesday, June 15, 2004 - 7:05 pm: | |
may not be. it only improves. |
Plz_kissme
Yavvanam Kaatesina Bewarse
Username: Plz_kissme
Post Number: 949
Registered: 03-2004
Posted From: 164.107.186.61
Rating:N/A
Votes: 0(Vote!) | | Posted on Sunday, May 16, 2004 - 3:13 pm: | |
CHIRU RULES |
Amar
Pilla Bewarse
Username: Amar
Post Number: 30
Registered: 03-2004
Posted From: 24.13.197.93
Rating:N/A
Votes: 0(Vote!) | | Posted on Sunday, May 02, 2004 - 9:48 am: | |
http://www.nytimes.com/2004/05/02/business/worldbu siness/02india.html
N early April, Infosys Technologies, an Indian outsourcing firm, had a party to celebrate reaching $1 billion in annual revenue. It gathered nearly 10,000 employees under a vast tent near its campus in Bangalore and plied them with food and live entertainment.
The company also distributed some $23 million in bonuses. "And we're doing a lot of other things to retain employees," said Stephen R. Pratt, chief executive of Infosys's consulting arm in the United States.
Infosys is hardly the only Indian company making a serious effort to attract and keep employees. Over all, according to a recent survey by Hewitt Associates, the international consulting group, wages in the country's major outsourcing sectors have been rising by close to 15 percent per year.
The reason is increasing competition for labor, thanks in large part to a rush by American companies to outsource work offshore. In fact, the competition has grown so fierce that the typical Indian operation in business processing - things like call centers and payroll, accounting and human resources functions - can expect to lose 15 to 20 percent of its work force each year, compared with single-digit losses in the late 1990's.
The surge in offshore outsourcing has, of course, attracted the attention of American politicians worried about the loss of jobs at home. On Friday, the presidential campaign of John Kerry announced its "Jobs First" tour and said, "While the president and his economic advisers have insisted that outsourcing benefits America, a record number of U.S. workers have lost their jobs to countries overseas." But, as the data from India show, the offshore outsourcing phenomenon may to some extent be self-correcting. Though outsourcing is surely here to stay, rising wages and rapid turnover in Indian hubs may put a dent in the cost savings that American firms enjoy when they ship work abroad.
The stiffest competition for offshore labor tends to occur in India's so-called first-tier cities: Bangalore, Mumbai (formerly called Bombay), New Delhi and Hyderabad. "You said it - Bangalore is a hothouse right now," said Jaithirth Rao, chairman and chief executive of the midsize outsourcing firm MphasiS, which has operations in the city. In certain sectors of the outsourcing market, attrition rates are 50 to 75 percent, according to Sunil Mehta, vice president of the National Association of Software and Service Companies, or Nasscom, an industry trade group in India.
The situation is particularly acute for managers in the business-processing sector. A typical outsourcing contract sends workers from an Indian company "onshore" - that is, to the American company's headquarters - while the outsourcing project is getting off the ground. The problem is that the onshore experience becomes a credential that is extremely valuable in the United States or the Indian labor market.
"Many don't want to go back offshore," said William S. McCarter, chief operating officer and executive vice president of ePolicy Solutions, a company based in Torrance, Calif., that focuses on Web-based technology services. "Or if they do go back offshore, they have a marketable skill to churn in the Indian market."
The situation became so dire last spring that, according to a report in India in The Business Standard, the top outsourcing firms in business processing reached an informal agreement not to poach employees from one another. Other retention measures included inserting clauses in employment contracts to require each new worker to observe a three-month cooling-off period after the hiring date before accepting another job offer. But wage increases have, not surprisingly, been the most common method of attracting and retaining employees.
The Indian outsourcing firm Wipro is a typical case. It gave its 24,000 employees in India an average raise of 10 percent last October; the increases were as high as 15 percent for managers. So far these costs have largely come out of the company's bottom line - denting its operating margin by 1 to 1.5 percentage points a quarter - rather than showing up as higher prices. (The leading Indian outsourcing companies have operating margins of 20 to 25 percent.) But a portion of Wipro's higher costs have been passed along to customers. "Certain customers got a price increase" last quarter, said Sridhar Ramasubbu, a company spokesman.
Indian executives like Mr. Rao of MphasiS, who also is chairman of Nasscom for 2004-2005, argue that the labor shortage, especially for middle managers, will be temporary. Local universities have already begun expanding the enrollment in two- and four-year business programs, he said. But there are reasons to believe that India's labor shortage will be more stubborn. A recent Nasscom report projected that if India continued to produce college graduates at the current rate, demand would exceed supply by 20 percent in the main outsourcing markets by 2008.
"Candidly, we see a labor problem in India right now," said Dan Zadorozny, the vice president for applications delivery at Electronic Data Systems, a global outsourcing firm that is based in the United States but has operations in India
Even with wages rising 15 percent per year, the cost of a computer programmer or a middle manager in India remains a small fraction of the cost for a similar employee in the United States. A programmer with three to five years' experience makes about $25,000 in India, but about $75,000 in the United States. But the wage savings from offshore outsourcing have never translated directly into overall savings - typically an outsourcing contract between an American company and an Indian vendor saves less than half as much as the wage differences would imply.
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ACCORDING to Praba Manivasager, chief executive of Renodis Global Outsourcing Solutions, a company based in Minneapolis that advises clients on outsourcing projects, the reason is twofold. The first has to do with the costs of the transition from doing work in-house to offshore, a process that usually lasts one to two years. During the transition, employees of vendors based in India must work in the United States. The second has to do with the cost of maintaining the outsourcing relationship. Personnel from the American company must make frequent trips to India, and the vendor needs some continued onshore presence.
"The vendor says, 'We'll save 40 to 60 percent; we'll give you such a great rate - $22 or whatever,' '' Mr. Manivasager said, referring to hourly wages. "But if the onshore rate is $50 to $55, and you have half the people onshore, the savings aren't going to be what are advertised."
It is not as if offshore outsourcing is going away. Indian outsourcing companies may simply shift their operations to cities like Nasik and Ponticherry, where wage inflation is still relatively mild. Others may outsource work offshore themselves, to China, Southeast Asia and Eastern Europe. Still, most experts say India is years ahead of countries like China in terms of its workers' facility with English, its telecommunications, the sophistication of its legal system and the stability of its political system.
Another possibility is that American companies may turn increasingly to global firms based in the United States - like I.B.M. Business Consulting Services, E.D.S. and Hewlett-Packard - to do their outsourcing work. The advantage of these firms is that they have locations in dozens of countries around the world - E.D.S. has a presence in 57 - so they can constantly shift work to the most efficient destination.
Such a trend may, in the end, bring a measure of relief to American workers. Of E.D.S.'s 36,000 global employees, more than 29,000 are based in the United States. Wipro, by contrast, bases 24,000 of its 28,000 employees in India. (The difference is that E.D.S. uses American workers for the onshore component of its contracts; Wipro uses Indian workers, dispatching them to the United States when necessary.)
If the increasing competitiveness of the Indian labor market begins to benefit companies like E.D.S. and I.B.M., outsourcing may one day no longer be a dirty word in a presidential election.
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