In a previous post on KPO, BPO and IT, I had wondered whether this Outsourcing thing is really beneficial for India. Let us look at a few recent developments:
-The US Government announced a hike in the H1B visa cap.
-SAP CEO: India is getting expensive
All this makes me wonder. If the visa cap is hiked, more and more software professionals from India will be able to work in the US. Assuming the same talent pool (or a part of it) migrates from India to the US, I would think that they would cost more in the US than what it would cost to hire them in India. Accounting for the fact that a company will prefer to have most of its RnD (research and development) folks close to each other, it simply implies higher personnel costs in the US in hiring and retaining. At the same time, SAP (and I am sure many others) feels that the costs in India are getting high to the limit that it makes it an unattractive destination for outsourcing. Now look at this (source here):
We have a couple thousand open technical spots that we cannot find people to fill," said Jack Krumholtz, managing director of government affairs for Microsoft, the world's largest software maker. If that situation persists, he added, "we're going to have to do more of our development work abroad.".....U.S. Companies are now limited to hiring 65,000 skilled immigrant workers annually under the H-1B program.Because of the visa cap, Intel has begun placing some foreign engineers in countries with more lenient immigration rules, like Canada, Ireland and Israel...
Is cost the only thing under play here? I mean if Microsoft is willing to shell out more bucks and have the folks come to the US rather than hire them in India, why are some Companies worrying about rising costs? If Intel is worried about not getting quality manpower, it is willing to hire the best folks from all over the world, and put them in Canada and Israel, bear higher costs and still be happy. SAP Labs India has more than 1000 personnel "engaged in collaborative software engineering that facilitates the delivery of innovative business solutions." I presume this is SAP's equivalent to RnD for Microsoft or Intel, but its still worried. Any guesses (unless you want to hear mine)?