Shyamal Majumdar: Going beyond BPOs

THE HUMAN FACTOR

The kind of hiring MNCs are doing in India makes it clear call centre operations are no longer the only thing on their minds.

Peter Sands, Standard Chartered Bank's Global CEO, has a strong connection with India in many ways. His mother was born here and among many things that he has picked up in his 'motherland' is a taste for South Indian delicacies. So while the attendant keeps serving steaming hot idlis, Sands says Stanchart may have its headquarters in the UK, but is an Indian bank for all practical purposes.

It would be unfair to dismiss this as just another sales pitch by a global CEO who is on a whistle-stop tour to India. Listen to Sands: Stanchart employs 14,000 people in India compared with 1,400 in the UK. "So I am sometimes confused when people in India refer to Stanchart as a foreign bank," he says with a laugh.

Sands' counterparts in many global companies would agree with this as they are ramping up their employee strength in India like never before. In quite a few cases, the Indian unit will soon beat all other countries in terms of the number of people employed.

Management consultants call it the growing Indianisation of the global workforce. That may be a slight exaggeration to drive home a point, but here are a few examples of this growing trend.

It didn't come as a surprise when Accenture's global CEO William Green announced in India a fortnight back that the company is planning to increase its employee strength to 35,000 (one-quarter of its global workforce) by August 31 this year. Its headcount in India will then be more than that in the US where the company has around 30,000 employees.

The point to note is that the recruitment is not limited to BPO alone and the company plans to recruit over two-thirds of the new employees across all other practices, including business consulting and technology services.

While 35,000 is a big number, it's still significantly less than the over 50,000 employees that IBM already employs in India. IBM has ramped up quickly, more than quadrupling its staff in India over the past three years. This means that one in six of IBM's workers all over the world is now based in India.

The reason is quite obvious. Several core IBM activities are now run exclusively in India and its investment in staff in the country follows a similar increase in sales to India-based firms: IBM's sales in India are up 37 per cent year-on-year.

Or, take Cisco. The world leader in networking for the Internet is planning to shift 20 per cent of its senior management to the company's Globalisation Centre East in Bangalore. The process has already been kick-started, with the transfer of its Chief Globalisation Officer along with a seven-member team to Bangalore.

Dell, another infotech major, employs more than 7,000 people in India, its largest workforce outside the US, and within a couple of years, the employees working in Dell in India will reach around 10,000 to 12,000. While most of the new hires will be for the company's call centres, Dell also intends to hire for product testing and possibly manufacturing jobs.

All these examples only validate the headlines on the front page of a glossy brochure promoting a jobs fair in Santa Clara, USA, which cried "" 'India is Hiring'. HR experts say the reason for this lies in some plain numbers.

Labour cost savings for US-based companies operating in India could shrink from 80 per cent to 40 per cent within a decade. McKinsey estimates that 33 million young professionals with university degrees and work experience now live in 28 low-wage countries, compared with 15 million in eight high-wage nations, including 7.7 million in the US. The number of university graduates from the low-wage countries is increasing at an annual rate of 5.5 per cent, compared with just 1 per cent in the high-wage countries.

In fact, Forrester Research estimates that US employers will move 3.4 million jobs and $136 billion in wages overseas by 2017. Those jobs will include positions in technology, finance, life sciences, human resources administration and business management.

HR experts say the wide variety of jobs nail the lie that foreign companies are only recruiting call centre employees in India. They are recruiting from the IIMs in large numbers despite the fact that Indian MBA salaries are now in the same range as those offered to grads of the top US business schools. In 2005, the average compensation of Harvard Business MBA grads was nearly $175,000, up 11 per cent from the prior year. Stanford and Dartmouth MBA grads averaged $150,000 salary packages last year.

Last year, Barclays Capital was the top recruiter last year at the IIM-Ahmedabad, hiring 15 full-time grads "" their highest ever from one management school. To put things in perspective, Barclays doesn't have a BPO operation in India.