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Offshore IT – Quick Fling or Long Term Marriage?

Posted by hiren on August 4, 2010 in Offshore IT | Subscribe

With India’s IT economy booming, everything is not as rosy as it seems. Attrition is becoming the big problem for IT companies all across India with employees ready to jump ship at any time. Of course, India is churning out IT talent like there’s no tomorrow, so hiring a replacement is not a big issue. There is however a hidden cost in training new recruits and the time it takes for new recruits to learn the business, projects and gel with the existing team.

Employees in it for the long term generate long term value as they build stronger relationships with their employer and a much better understanding of the business. The problem is with India’s IT wages rapidly increasing, employees expect big pay hikes which ultimately eats into the employer’s profits. Is it better to let employees leave for higher pay elsewhere and recruit another low cost Indian IT professional as a replacement or retain for the long haul?

There are arguments for both sides, costs need to be controlled yet businesses must look to hire for the long term. I think there is more than salary that pushes employees to switch jobs because by nature most people resist change and moving to new jobs. So why are so many people leaving their jobs?

During my time in the IT sector, I have worked with both developers from India and the UK. There are some fundamental differences in the employment system, employee attitudes and employer attitudes. Although India is growing in IT talent, it still lacks fundamental employee rights meaning employees are more likely to suffer and complain in private rather than to their employers. With employers in India having the ultimate right to dismiss employees as they wish, it’s little wonder why employee problems remain hidden and the only way out is to find another job.

This presents a good opportunity for those who can create the right working environment and culture for their employees. With India’s abundance of lower cost IT talent, it’s easy to take the factory farm route to drive productivity and reduce costs but only at the expense of long term value and loyalty.

It’s far better to focus on long term value and loyalty to gain the long term benefits. It’s just the core things we as employers should provide to get the best from India’s IT talent

  • Treat your workers as humans, not chickens. Give them space to work and provide the right infrastructure and facilities so they can work to their best. Employees also want to work to the best of their ability to grow so why not facilitate this and reap the long term rewards together even if it costs you slightly more initially.
  • Give some respect. Good work deserves praise and praise costs nothing. By far the most cost effective productivity booster. As they say, the best things in life are free.
  • Pay a decent salary. I’m not saying go over the top and give massive pay hikes each year. If you’re getting the other things right, employees won’t need such a huge pay hike to compensate for deficiencies in other areas.
  • Make sure your management is acting fairly and in a just manner. It’s easy for managers to let their power go to their head. Make sure employees can complain right to the top without having to go through supervisors and management.
  • Be nice and make your brand and company a place to stay. Employees talk and good words about your company can get out quickly. Surprise perks can get employees talking. However, it can easily go the opposite way. Respect your employees and they will respect your company and brand. Together companies and their employees can create long lasting value and loyalty together for the benefit of their customers.

At Virtual IT Studio, we like the organic route, it may not be as cheap and cheerful as the factory farm, but it’s a lot more humane and lot more beneficial to both employees and clients in the long term. We always strive to find ways to drive value and benefits for both our employees and our customers. Together we can be a success!

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