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Indian firms hiring US staff, reversing trend

'Reverse offshoring' has set in the Big Apple, where Indian giants like TCS, Wipro and Infosys are hiring majorly.

business Updated: Jun 19, 2007 15:31 IST

Indian companies, which are becoming major players in the International arena, are hiring aggressively in the United States, reversing the earlier trend when they always transferred Indians to work in America on temporary visas.

Terming it reverse "offshoring", a new report names India's largest offshoring firm Tata Consultancy Service Ltd (TCS) and software giants Infosys and Wipro among them and saying some American workers laid off are now re-employed in Indian outfits after training in India.

Wipro Ltd, for instance, is scouting US locations for two big software writing centers that eventually could employ hundreds of programmers each. Cities on its short list include Austin, Tex, and Atlanta, because of their deep tech-talent pools and reasonable salary costs, the leading business magazine says.

"The work we're doing requires more and more knowledge of the customers' businesses, and you want local people to do that," Wipro Chairman Azim H Premji is quoted by Businessweek as saying. Today only 2.5 per cent of Wipro's global workforce is non-Indian, but the company wants to boost that to more than 10 per cent in a few years. The Indian outsourcers are quoted as saying that their US expansion plans predate the latest concerns over immigration and jobs.

But they acknowledge the trend might ease tensions as the Senate mulls regulations that would require companies applying for H-1B visas -- temporary working papers for foreigners -- to try hiring Americans first.

"If we can hire close to our clients, we don't have to bring in somebody from India on an H-1B," S Padmanabhan, human resources chief for Tata Consultancy Services Ltd (TCS), India's largest outsourcing firm, said.

About 1,000 of TCS's 10,000 US-based workers are Americans (out of 90,000 total employees worldwide). And it plans to hire an additional 2,000 Americans within three years. Surprisingly, BusinessWeek says, it often costs more to ship in Indians on a temporary basis than it does to hire Americans.

Base salaries are comparable, because Indian companies must by law pay market rates for people they bring in on work visas.

But the companies typically have to provide the Indians with housing, and retirement benefits cost more because of India's social security contribution requirements.

Also, as the Indian rupee has risen more than 10 per cent against the dollar this year, hiring Americans has gotten cheaper. At the same time, fierce competition for tech talent in India is pushing salaries there up by 12 per cent to 15 per cent per year, although they remain less than a third of those in the US.

The Indians, says BusinessWeek, are recruiting a combination of fresh college grads and experienced veterans who have worked at American companies.

They're especially active at campus job fairs, and unlike a few years ago students know who these companies are and respect them. In fact, the Indian connection has become an attraction.

"I thought this would be a fantastic opportunity, especially because they send you abroad for training," Brian Oswald, a 23-year-old Rutgers University graduate with a 2006 degree in industrial engineering who joined TCS in February, was quoted as saying.

The US hiring by the Indians, the magazine says, echoes the strategy Japan's auto industry devised after soaring levels of imports sparked political outcry in Washington in December 2000.

"The Indians are doing to the world's IT processes what the Japanese did to manufacturing," says analyst John McCarthy of Forrester Research Inc (FORR). And now, like Japan's carmakers before them, the Indians are becoming major employers in the US as well.