Reminder: Why Outsourcing IT to India is Still Hot

In case you needed a refresher on why India is still experiencing rapid IT outsourcing growth here are some statistics (from The Economist Magazine):

* Every year India produces around 2.5M university graduates, including 400,000 engineers and 200,000 IT professionals
* India's National Association of Software and Service Companies (NASSCOM) calculates that the country has 28% of the world's IT offshore talent
* They work while the West sleeps
* They speak (splendid) English
* They can throw huge numbers of people at an IT project
* The cost of an Indian graduate is roughly 12% of that of an American one
* Indian graduates also work more: an average of 2,350 hour a ear compared with 1,900 hours in America and 1,700 in Germany
* A company can buy almost 10 Indian brains for the price of 1 American one

The World is our Oyster. [The Economist, October 7th, 2006]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

The World Economy - 1990, 2005, 2050

The following slides illustrate the history and predictions on the global economy through 2050 [Presented by Spiegel Online with data sourced from Madison, IMF, and Goldman Sachs]. Click on any slide to display in a larger size.







China has risen to the ranks of a global economic power and sets out on a course to surpass other nations in terms of economic might. Russia lags, India starts to develop, even if only gradually.



The World in 2050
The investment bank Goldman Sachs peers into the time machine: China has soared above the United States. Europe, once the motor of industrialization, has fallen markedly behind -- even India is ahead. Resource rich Russia has reestablished itself as a global player.

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Workforce Vision * workforcevision.blogger.com * By Bill Inman * http://www.billinman.com/ Human Capital -- Contingent Workforce -- Globalism -- Workforce Trends -- Outsourcing

America's Middle Class - Global Loser

"There are essentially three exclusive characteristics whose simultaneous development have served as the foundations of the United States's success up until now -- and they only appear in this particular combination in America. They are not only the country's biggest strengths, but also its greatest weaknesses," as Gabor Steingart writes in his book World War for Wealth: The Global Grab for Power and Prosperity. They are:

• "Nowhere in the world can you find such a high concentration of optimism and daring"
• "The United States is radically global"
• "The United States is the only nation on earth that can do business globally in its own currency"

However, these very strengths have hurt the U.S. workforce by inadvertently causing:

• A "Blur [in] the line between optimism and naivete," that has given rise to "public, private and corporate debt far exceeds any previously known dimensions
• "Globalization [to] strike back...the United States has promoted the worldwide exchange of commodities like no other nation, and the result is that their local industry has begun to be eroded"
• "The dollar [to not] just strengthen the United States; it also makes it vulnerable. The government has pumped its currency into the world economy so vigorously that the dollar can now be brought to the point of collapse by external forces"

And "the rise of Asia has only led to a relative decline of the US national economy. At least so far. But for many blue- and white-collar workers, this decline is already absolute because they have less of everything than they used to. They possess less money, they are shown less respect in society and their chances for climbing up the social ladder have deteriorated dramatically."

America's Middle Class Has Become Globalization's Loser - [Spiegel Online]

Workforce Vision * Post: Bill Inman * Human Capital * Contingent Workforce * Globalism * Trends * Outsourcing

Is Social Capital 'the New Black' for Human Capital?

Contrary to conventional wisdom -- firms can (and quite possibly must) learn when employees leave their company, not just when they hire away an employee from another business. A Wharton School research paper studies the social capital of employees who leave and who can be tapped into when they are future companies...

"The social capital approach would predict that the firm losing an employee would gain access to the new employer's knowledge, while the human capital approach would not," the researchers suggest in their paper."

With my focus being on human capital for over a decade I find this statement on "Social Capital" quite compelling. Maybe, with the advent of web 2.0 social networking, there is a shift from internal knowledge and training to building strategic alliances on the individual level utilizing human capital alumni (who then transfer their knowledge to the social capital realm) to increase the flow of industry and competitive knowledge!

The Social Network Benefit: Losing an Employee Doesn't Have to Mean Losing Knowledge. [Knowledge @ Wharton]

Read the Research Paper behind this article.

“Where the Brains Are…” - The Clustering of U.S. College Graduates

Richard Florida, the author of the book The Rise of the Creative Class, and the Hirst Professor for Public Policy at George Mason University writes:

”Today, a demographic realignment that may prove just as significant [as the pioneers westward, the rural South to Urban North, and city to suburb migration] is under way: the mass relocation of highly skilled, highly educated, and highly paid Americans to a relatively small number of metropolitan regions, and a corresponding exodus of the traditional lower and middle classes from these same places.”

Read more on the “Means Migration”:

Where the Brains Are. [Richard Florida] PDF

Indian Temporary Staffing to Grow Exponentially by 2009

‘Flexi-staffing firms will be big employers by ‘09’

DH News Service Bangalore:

The size of the Indian recruitment market is a huge Rs 4,500 crore and is growing at a healthy 50 per cent. Flexi-staffing (or temporary staffing) market in India is a whopping Rs 1,000 crore, growing at 100 per cent and is fastest growing market in the world. Flexi-staffing companies are all set to be largest employers in India by 2009. These were some of the statistics shared by Kris Lakshmikanth, Secretary- Executive Recruiters Association (ERA), at its national convention, held in the city on Friday. The theme of the convention “War for talent — The Next Decade” threw up some interesting insights .The three major factors in this war for talent is attracting, retaining and motivating talent. In his inaugural address, Ganesh Natarajan, MD, Zensar Technologies, said, “people do not leave an organisation for more money, they leave because they are not taken care of, by the employer.

It is important for us to focus on what motivates people and provide them with an answer to the WIIFM (What’s in it for me?) factor.” He said 90 per cent of the future manpower needs in the IT sector cannot be met, as less than seven per cent of the fresh engineers are not employable for the sector. If the problem of talent shortage is not addressed, India will lose out to China. If India has to achieve an elevated economic status in 2050 which Goldman Sach’s study on BRIC countries prophesies, it can only happen by managing and retaining talent, said V K Vishwanathan, Joint Managing Director, Mico. Meena Ganesh, CEO of Tesco Hindustan Service Centre said the only way to retain an expanding workforce it for the top management to be constantly visible and in touch with its employees on an ongoing basis. Stressing on the importance of a strong organisational culture, Hari Iyer, Culture Officer of Sasken said, “the culture of the company is the key differentiator, it attracts, retains, rejects and ejects its employees.

Original Article Link
http://www.deccanherald.com/deccanherald/jan72006/business181551200616.asp