Global service giants step up hiring in India

BANGALORE - When Massachusetts-based consulting firm Sapient moved to a new office in Bangalore last week, there was a telling statistic -- 1,250 workers, more than half its global staff, are now in India.

By Narayanan Madhavan (Reuters)

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Published: Wed 1 Jun 2005, 1:29 PM

Last updated: Thu 2 Apr 2015, 4:43 PM

As English-speaking Indian graduates plug into cheap, high-speed telecoms at one-fifth of U.S. wages, the billion-strong nation is a hotbed for headhunters.

Global giants such as International Business Machines and Capgemini are raiding the home turf of Indian software services leaders such as Tata Consultancy Services , Infosys and Wipro Ltd.

India’s software association reckons foreign firms have created in excess of 150,000 jobs in IT and back-office services.

“If you look at the value-for-money proposition, the costs in developed countries are ridiculously high. Ultimately, it boils down to cost,” said Sandeep Shenoy, analyst at brokerage Pioneer Intermediaries.

“And running a multi-thousand (employee) company in China is a nightmare, while it is definitely possible in India, where Indian companies are already doing it.”

For its part, Sapient said it was looking to deliver high-value service at a competitive cost.

“India’s enormous talent pool has made it possible for us to do this successfully,” the company said.

Accenture and IBM’s services unit now have about 10 percent of their global workforce in India. Electronic Data Systems and Perot Systems are also recruiting workers by the thousands in India.

Price-to-earnings multiples of 30 or more commanded by Indian companies were a wake-up call for global players, said Ajit Isaac, managing director of Adecco PeopleOne, the Indian unit of Swiss Adecco , the world’s biggest staffing group. The world giants have multiples closer to half of that.

“Unless Accenture, IBM and HP (Hewlett-Packard) generate a delivery model which has a compelling pricing advantage, assuming the same quality, they would not be able to compete,” Isaac told Reuters.

For services-based companies based on skills ranging from accountancy to high-tech consulting, the obvious port of call is India, as China is for manufacturing, analysts said.

But, concerned about a backlash from Western trade unions and politicians at the prospect of job losses, some firms hold back details on hiring. Still, flashy newspaper ads say a lot.

“Raise your sights,” Accenture said last week in a walk-in interview call for jobs in five Indian cities. It promised learning opportunities and global exposure to employees.

Rekha Menon, head of Accenture’s India Geographic Services, said her unit provided services in software, procurement, finance, human resources, customer research, call centers and drug research. Hiring was on in all regions, she said.

Earlier this month, IBM said it would eliminate up to 13,000 jobs, mainly in Europe. It has advertised jobs for engineers, programers and accountants in six Indian cities.

IBM said its $170 million acquisition of Indian call center firm Daksh eServices last year gave it a big local edge.

IBM, whose services in India range from software maintenance to business consulting, has 23,000 employees, about two-thirds of the staff of Infosys or Wipro. Most of IBM’s Indian staff are in services, while its global service workers total 190,000.

EDS, considered a slow starter in Indian operations, said this month it may consider having an Indian partner to hold on to its 10-year deal with General Motors coming up for renewal. It has 2,900 Indian workers in back-office and IT work.

“Our pipeline is strong and we expect to touch a headcount of about 5,000 professionals by the end of 2005,” said Abhay Gupte, managing director of EDS’s Indian unit.

EDS is looking at this region very, very seriously.”

Perot Systems, EDS’s Texan neighbor, said it planned to boost Indian staff to 7,000 by the end of the year from 2,500. It already has a quarter of its staff in India.

Capgemini, Europe’s largest computer consulting firm, said it planned to hire 200 people per month in India to possibly quadruple its local workforce of 2,500.

Its French consulting peer Valtech plans to more than double its Indian headcount to 1,000 next year from 450 now-more than a combined 650 staff in the United States and Europe.

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