Outsourcing

Bangalore back from recession with job-hopping boom

Outsourcing workers voting for pay hikes and perks with their feet

While the West is still mired in recession, India outsourcing hub Bangalore is already seeing evidence that the worst of the economic downturn is behind it, says Saritha Rai.

In Bangalore technology and outsourcing companies managing flocks of employees, whether as few as a dozen or as many as 100,000, are grappling with the same bunch of problems.

This time last year, they were busy paring down salaries, laying off workers and shrinking their 'benches', or people on stand-by. Currently, they are working themselves into a sweat over their job-hopping employees.

The surge in job-hopping has been brought on by the recent uptick in the outsourcing industry. India's economy has weathered the downturn better than the West, where the mass of outsourcing firms' customers are located. Outsourcing to India is already accelerating, after a brief lull, creating a rising demand for talent.

Pramod Fernandes, director of human resources for Logica India, says: "Currently attrition is only a concern but if the trend continues, it will become a worry." Logica India has 4,000 employees, a bulk of them located in Bangalore.

bangalore india mall

Young technology workers enjoy hanging out at malls such as this one on Mysore Road in Bangalore. See more photos of Bangalore here.
Photo credit: Saritha Rai/silicon.com

Even the most high-profile of employers is not immune. Brokerage firm CLSA, for example, said in a recent note that 4,000 workers had quit Bangalore-headquartered outsourcing firm Infosys Technologies in February alone. That is close to about four per cent of its 110,000-strong workforce.

Infosys has kept schtum on the matter. A spokeswoman told me the company could not comment as it was in its pre-quarterly results "quiet" period. Infosys' employees have had two pay raises in the last few months.

A recent quarterly survey by international HR service provider Ma Foi Randstad ranked India first among 23 countries in terms of workers' readiness to change jobs. Bangalore was singled out as the Indian city with the most fickle employees, with workers most open to a job change in the next six months.

High annual attrition rates, around 25 per cent in services companies to as high as 100 per cent in some BPOs, have long been the bane of Bangalore's outsourcing companies. A constant churn drives up recruiting and training costs for companies and adds to productivity costs...

About

Saritha Rai is an India-based journalist and commentator who covers technology, business and society from her ringside seat in Bangalore.

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