Posted on 02/13/2008 7:25:41 AM PST by CarrotAndStick
IBM is not feeling the impact yet of reduced growth in IT budgets, and plans to continue hiring global services delivery staff in India by the thousands.
IBM plans to continue hiring global services delivery staff in India by the thousands, adding to the 73,000 it already has in its global services and other operations in the country.
A large number of Indian outsourcers and multinational services companies have set up services delivery operations from India. Their competition for the best staff is driving up salaries. Companies are however introducing quality systems that enable them to weed out low performers. IBM, for example, sacked about 200 staff earlier this month, after a staff appraisal. Indian outsourcer Tata Consultancy Services said a day later it had terminated 500 staff after a similar staff appraisal.
Staff attrition in IBM's global services delivery operation in India is within 0.2 percent from the attrition rate at IBM's global services operations in the U.S., said Diane Gherson, vice president of human resources (HR) for IBM's Global Business Services.
"Our business model is based on that range of attrition, and we don't mind some attrition because it helps us get fresh talent, and offer growth to people in the organization," she said Wednesday.
Although staff salaries are rising in India higher than in most other countries, IBM has been able to recover the increased cost from clients by offering staff with higher skills, Gherson said. Salary increases will however eventually become a problem for India if the amount staff are charging cannot be recovered from clients, she added.
Even as some research firms have warned of reduced growth in IT budgets in the U.S. this year, IBM is not feeling the impact yet in its services business. "They will talk themselves into a recession if they are not careful," Gherson said. Besides, over 65 per cent of IBM's revenue comes from outside the U.S., she added.
Forrester, for example, forecast on Monday slowing growth this year for purchases of IT products and services in the U.S., based on the assumption that a mild recession will hit the U.S. economy in the second or third quarter.
IBM's services delivery strategy has been to set up delivery operations in a large number of countries to tap talent in these countries, and also to deliver to the customer a variety of skills and services, including language skills, and services delivered in the same time zone as the customer, said Rajesh Nambiar, Head of IBM's global delivery business in India.
India is IBM's second largest location outside the U.S. for global services delivery, and will likely hold this position at least for the next five years, Gherson said. India is also an important market for IBM, Nambiar said. The company earned revenue of about $1 billion from the Indian market last year.
Business is business but I have a disdain for American companies that take jobs overseas.
Not sure if that’s exactly what IBM is doing here. A lot of their customers are in India. So it may just be common sense that they need to have IT guys there too in order to support the solutions that they sell to others who have outsourced IT projects.
One of our clients last year dumped 70% of the IT and software staff ( over 300 people ) and moved it all to IBM Global services ( India ). Now when I have to interact I have to have a friggin’ translator or they are not available during our business hours and they just don’t get it when we discuss programming issues.
I don’t see the computers going there however. IBM’s mainframes are staying in New York and they are increasing the speed between the two.
Once the iron moves over it will be different.
I have no problem with proportionality in hiring, but that is not what is happening here. Almost all of the new hires are in India and other such places, while a fraction of their business takes place there.
The American worker is screwed.
That's the kind of freak who outsources American jobs. Does so gleefully -- anything to hurt the U.S.
For those of you who might question my web search, note that the location given is Somers, NY; that's just down the road from Mt. Kisco and Armonk, where IBM has its headquarters. Not a coincidence.
Take a tour of the website. Try to calm down afterward.
That's who the outsourcers are. America haters.
These companies should be required to pay an import duty on the software authored overseas. It is valued in the millions.
I’d think it was a discriminatory hiring practice to offer preferential consideration to East Indians in America.
The American college graduate has been betrayed because the degree that he paid for will not return on the investment of time or money.
In other words, the more people they hire in India the more equipment they need to buy. I'm sure IBM has made some very good deals with American companies who decide to employ staff in India.
What goes around comes around. Many companies are coming home and the ones that cannot by contractual obligations are regretting their choice since 90% of software and 100% of documentation from over there sucks.
A billion customers can’t be wrong.
Interesting....
Yes they have a right to sell out their Nation to the dollar, and I will continue not to buy from them. As far as I am concerned when you sell out your country you are on the same level as OBL.. F..k IBM!
Yes they have a right to sell out their Nation to the dollar, and I will continue not to buy from them. As far as I am concerned when you sell out your country you are on the same level as OBL.. F..k IBM!
I work with some of these companies who are global... oh my gosh. The money 'saved' by the companies employing offshoring is paid by the companies having to do business with them. The time spent on figuring out/finding the dept. who handles your problem is a joke. What used to take a few minutes is now a top-heavy process.
Actually they are identified as an aggrieved minority under the EEOC regulations. In other words, a group of people who never had anything to do with the U.S. until about 1965, and who number in excess of 1.3 billion, are considered an Oppressed Minority. How do you think that Patel became the most common name for motel owners in the U.S. in just 30 years? They had preference for government loan guarantees under SBA rules.
If, say, 15% of the Indian population were to "immigrate" to America, which is 200 million people, they would then be the vast ethnic majority, and India would be glad to get rid of them. Think they'd vote for Affirmative Action for Pale People?
If a company outsources hi-tech work, it’s far better to send it to India than China.
True, that is the lesser of two evils.
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