IT biggies step up hirings abroad

Indian IT companies are stepping up local hiring in the US and Europe as securing visas turns a difficult and expensive proposition.

Big names like Wipro, Infosys and HCL, long accused of stealing jobs in the US, are making efforts to increase their local presence not just in the US, but in countries like Germany, Canada and the UK. Take the case of HCL, which has decided to create 10,000 jobs in the US and Europe alone over the next 5 years. Even Infosys and Wipro are lining up plans to beef up their local hiring abroad.

Experts feel that the hands of the companies are tied because of stricter guidelines of the US consulate in the wake of the Infosys visa episode. According to Nasscom, stringent visa regulations remain a big challenge. What is compounding the pain is the fact that in most developed countries, immigration laws continue to be a much politicised issue. For instance, Nasscom has been pushing for intra-corporate transferees (ICT) work permits accepted in the EU. However, this will only mitigate the challenges faced by EU-specific projects. For the US, visa rejection rates remain higher than ever before, which precisely means higher uncertainty of project implementation plans for an India-based IT vendor.
“For regions like the Americas, the visa and immigration laws make it imperative for us to continue inducting local hires,” said Priti Rajora, global head, talent acquisition, Wipro. “We do local hiring across 11 countries and have seen a significant growth this year in terms of the talent required. We expect the trend to continue due to organic and inorganic growth projections.”
Kris Lakshmikanth, chairman and MD, Headhunters, chipped in: “The Jack Palmer case created a stir in the Indian IT industry. None of the companies now want to take a chance. So, they would prefer local talent for some of their projects.”

The US elections provide another angle here. As the polls loom, Indian companies are keen to portray themselves as truly global. “The economic slowdown across the world and especially in developed economies like the US and Europe is putting pressure on social and community systems. The grave unemployment challenge needs to be addressed in these countries,” said a spokesperson from HCL.

For Infosys, non-Indian employees constitute 6.46% of its total workforce. “We are looking at increasing our workforce diversity so as to leverage talent across countries. Our strategy is to hire locally in all the geographies that we are present in and we have been hiring in the US, Europe and are looking at increasing our headcount in China,” said Nandita Gurjar, head of human resource, Infosys.

These companies have long derived a big chunk of their revenue from the US and Europe. And with growth in operations, there is a need to bolster functionalities like consulting services, sales and marketing. “For services like consulting, one needs to interact constantly with clients who prefer someone from their own community. Hence, companies are not left with much of a choice,” said Lakshmikanth.

Also, many feel local hires have a better understanding of the external environment and cultural nuances of the region, thus strengthening the understanding of customers. However, the companies need to do their homework right as hiring abroad can affect their margins. “Companies have to maintain revenue which outpaces the cost of hiring on shore employees. Usually, hiring an onshore employee is three times the cost of an employee here. So, companies need to increase their rates per hour to deliver high revenues,” said an expert.

According to Sid Pai, managing director, TPI, in order to reach the ranks of IBM and Accenture, Indian firms need to spread their presence globally. “Visa issues, emigration laws are there, but in the long term the Indian IT industry is going to benefit by having a presence in countries like Australia, China and the like,” he said.