Indian IT Companies Gear Up With More Onsite Hiring

The article was first published in Globalservicesmedia.com

As the US immigration bill is slowly progressing to the next stages and inching towards being passed, Indian IT services companies are already getting aligned to the protectionist and rigid nature of the proposed reforms.

As US and UK, the most important markets for India's IT services industry, are more focused on protecting jobs because of the increasing unemployment levels, Indian companies are increasing local hiring in these countries.

Gartner has estimated that by 2016 India's leading IT services companies will triple direct hiring in the US. And will also focus on significantly increasing their presence in the European markets.

Quite recently, it was reported that Infosys has bagged many multi- million outsourcing deals because of its increasing onsite presence. Analysts were of the opinion that the company's strategy of hiring quality talent in client locations seems to be paying off. TCS also has over 50 percent of onsite employees. The percentage of onsite workforce is relatively lower for IT majors like TCS and Cognizant. So these companies would see a higher impact if the current bill is passed.

While onsite hiring increases the competitive edge for Indian IT companies in pitching for high-end service deals, and also helps them be in line with the current immigration rules, it definitely puts a pressure on the margins as higher local talent is more expensive.

Experts advise that while in the current scenario it is essential for Indian IT companies to establish a local footprint, in order to reduce the burden on profit margins companies should look at low-cost regions. Also it is expected that if the rupee continues to slide, most IT companies would be able to balance out the cost impact of the bill.

What is your opinion on the impact of the proposed bill on the Indian outsourcing model? Write to us and share your feedback at smitav@cybermedia.co.in