IT outsourcing gains momentum again

“I was unemployed and it was tough, but I’ve got work again,” said the 26-year-old Sen, who landed a job recently with a small outsourcing company in India’s high-tech hub of Bangalore.

Sen is benefiting from a hiring wave by India’s outsourcing sector which is set to increase recruitment by nearly 70 percent in the next financial year, according to the National Association of Software and Services Companies (Nasscom).

India’s big three outsourcing companies — Tata Consultancy Services (TCS), Infosys and Wipro — all have plans to boost hiring sharply in the coming financial year.

“The feel-good factor is back in the industry,” said Prithvi Lekkad, head of the Union of IT and IT-enabled services (Unites) Professionals, a trade union which represents some outsourcing workers.

India’s software and services exports are expected to grow by up to 15 percent to hit 57 billion dollars in the next fiscal year to March 2011.

The growth projected for next year is still far below the blistering 28 percent export revenue rise clocked in the financial year 2006-07.

But it is allowing major companies to bump up hiring again after a year in which they froze salaries and sharply reduced recruitment.

The big companies have been returning to university campuses to recruit in large numbers with new orders in the pipeline.

“Prospects for jobs are bright now,” R.K. Akash, a 21-year-old computer science student, told AFP.

Indian software companies, whose breakneck growth has been an important driver of the country’s economic modernisation, were hit by the global slump that prompted many customers to put projects on hold.

More than 2.3 million people are employed in the sector either directly or indirectly, making it one of the biggest job creators in India and a mainstay of the national economy. It accounts for 5.9 percent of gross domestic product.

India’s success has been in convincing US and other foreign firms, drawn by a vast, educated English-speaking workforce and low labour costs, to farm out processes that were previously done in-house.

Companies provide a slew of services ranging from answering banks’ client calls, processing insurance claims, legal work and equity analysis to engineering and computer systems design.

“We expect net hiring in the ensuing fiscal year to be over 150,000,” Nasscom president Som Mittal told AFP.

That is up from net additions of 90,000 in the current year but still far off peak levels of 250,000 to 300,000 before the global financial crisis hit.

The Nasscom outlook comes after TCS, Infosys and Wipro announced forecast-beating quarterly earnings.

“Spending is coming back, decisions are being made (on new orders),” Nasscom chairman Pramod Bhasin said, adding the industry had “reinvented itself” during the downturn by cutting costs and making itself more efficient.

But while more hiring is being done, Bhasin said the industry was changing its hiring practices to reduce so-called “bench time”, when workers are idle, waiting for new projects.


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IT outsourcing gains momentum again