Aug 14, 2007

India's pampered talent?

According to Businessweek's article India's Talent Gets Loads Of TLC Indian talent seems to prefer Indian IT firms compared to MNCs like Accenture and IBM.

The article quotes:

"When I heard IBM's presentation at a job fair, they talked a lot about their brand and innovation but not much about training," says Sanjay Joshi, 22, a graduate of MS Ramaiah Institute of Technology in Bangalore. "That's why being at Infosys is the Indian middle-class dream." Building showpiece campuses the size of many U.S. colleges is just one way big Indian employers are battling to hold on to budding engineers, designers, and finance specialists. Not long ago, India's skilled labor supply seemed limitless. Today, companies face high turnover, escalating salaries, and shortages of qualified workers and managers. Less than a quarter of companies surveyed in 2006 in India by McKinsey & Co. said they were meeting recruiting needs. By 2010, McKinsey predicts, India will face a shortfall of 500,000 staff capable of doing work for multinationals. The scale of the human-resources challenge is dizzying. Six years ago, for example, Accenture Ltd. had 250 workers in India. By this fall, it expects to reach 35,000. To keep staffers happy, Accenture assigns each a career counselor and offers some 10,000 online courses, from languages to Harvard Business School classes. "People here are driven," says Rahul Varma, Accenture's senior human resources director in India. Satisfying high career expectations can be tough. Just a few years ago, IBM , Microsoft , Hewlett-Packard , and Coca-Cola could lure all the top Indian grads they needed on the strength of their names. "Now multinationals are losing talent because they made false promises about careers," says Soumen Basu, who heads Manpower's India office. Some companies have grown so fast that it's common to find 25-year-olds managing 23-year-olds who are managing 21-year-olds. But as India's tech services industry matures, such rapid advancement can't be guaranteed.

I think that's oversimplifying things. The employment branding of an MNC is nothing to sneeze at. Even the quality of work being done in India by Accenture, IBM, Cisco, Texas Instruments is very high in the value chain. In fact, a European consulting giant after moving its Technology and Outsourcing back end to India is now toying with the idea of having some Finance and HR consultants travel on work for its UK practice but be based in India.

The Google R&D team in India apparently came out with the Google Finance application. TI's high end chip design work happens in India. The enterprise application consulting business of a large US Big 4 firm is dependent on India to survive. If the Indian office were to shut down they wouldn't be competitive in the US on cost basis.

I am still not willing to give a thumbs down to the MNCs. Most of them are taking the battle straight to the Indian outsourcing firms.