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India’s top three
outsourcing companies are ramping up hiring as global corporations, mainly from
the U.S., send more work offshore to cut costs as they emerge from the
downturn.
Tata Consultancy Services,
Infosys, and Wipro expanded their global workforces by an average of 5.1
percent last quarter, together adding 16,701 employees, company documents show
— an early sign that the Great Recession may ultimately benefit India as
cost-conscious companies outsource more work, just as they did after the
dot-com bust.
“Our expectations are for
flat to marginally stronger IT budgets with a greater share of offshore spend,”
according to Wipro chairman Azim Premji. “Our customers remain focused on cost
reduction.
The employment revival in
India’s outsourcing sector, which counts on the U.S. for about 60 percent of
global sales, comes as unemployment in the U.S. stagnates around 10 percent.
“When there is a downturn
the compulsion to control costs increases,” said Dipen Shah, an analyst at
Mumbai’s Kotak Securities. “The demand for offshoring will increase. That will
play to the advantage of Indian IT companies.”
He argues that the cost
savings from offshoring has helped U.S. companies survive — and that’s good for
the American worker.
“You might say jobs in the
U.S. are getting displaced by jobs in India, but because of the value provided
by Indian companies and lower costs, there are firms who are able to keep their
heads above water and continue to employ their existing employees,” he said.
TCS, Infosys and Wipro
reported stronger than expected results for the December quarter, with revenue
and volume growth, signaling that the cost-cutting imperative of this last,
lean year may be over for India’s $60 billion software services industry.
After about a year of hiring
slowdowns, all three companies are sweetening compensation as the fight to hold
on to talented employees in India heats up.
Infosys offered its Indian
employees an average 8 percent pay hike in October, their first raise since
April 2008, and executives said last week they are considering another raise to
combat rising attrition. It recently raised its gross hiring target for the
second time this fiscal year, to 24,000 people.
Tata Consultancy Services
has paid out 150 percent of performance-linked pay — which normally amounts to
20 to 45 percent of compensation — for the last two quarters, and executives
say they will raise salaries next quarter, after a year-long wage freeze. (AP)
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