India's IT industry problems
India's Information Technology (IT) outsourcing industry is experiencing two major problems that could hurt its future: It does not have enough skilled workers to meet the global demand anymore and it has the highest employee turnover in the world.
According to India IT industry study, one in three software workers in India were switching jobs every sixteen months for better salary as demand for skilled workers continues to increase. It also raises the cost of doing business in India higher as it is no longer the best place to outsource software anymore. An Indian executive lamented: “We are in an “employee turnover storm” where customers are beginning to question our quality and the way we manage workers. When workers are changing job often, they do not learn much. As our skills are decreasing, our costs are increasing and we are currently in big trouble of losing many customers.”
According to the study, employee's turnover will continue to rise with no end in sight. A software developer explained: “For many years we are working long hours to make company's owners and top managers wealthy but we receive nothing. When top managers are making several million dollars a year, we are making only twenty to thirty thousand dollars so we must continue to switch job to get better salary. Since each time we switch job, we could make more so why not? There is no loyalty when there is a big difference between software workers and managers.”
The study found most Indian workers expressed concerns about the fairness of their compensation. Many worried over being able to achieve their career objectives with their current employers as only few would get promoted to managers. As a result, many continue to switch job to get better paid rather than continue to work for the same company. The study warned: “In the next five years, more workers will switch job and the cost of doing business in India will getting to the point of being similar to the cost in the U.S. which means many customers will have to find another country to outsource to and it could means the end of India's $120 billion dollars a year outsourcing business.”
Sources
- Blogs of Prof. John Vu, Carnegie Mellon University
