Indian IT plays the local workforce card

Indian companies are hiring locals at their offices abroad, a tactic that helps them skirt visa tangles and establish a strong foothold in foreign markets, says Abhinav Singh

India Inc cannot do without a local workforce at its overseas offices. It has become imperative for Indian IT firms to hire locals as these employees hold the key to their survival abroad. Indian software companies are facing tough competition from MNCs and this has led them to play the local workforce card to gain the extra mileage that they needed in the international market. Factors such as visa issues and the ongoing backlash against Indian IT professionals are likely to further fuel this phenomenon. Hiring locals also helps them gain a stronger foothold in overseas markets.

According to Anurag Shrivastava, locals with wide experience in product companies can help add value to products during the development stage

To get the flavour of the local market

To be successful abroad, Indian companies feel the need to drive their marketing strategies on track with local needs, which can come only from locals who reside there. This may also include people of Indian origin in those countries. The key lies in hiring people with a grasp of the local market. Says Anurag Shrivastava, director-human resources at Talisma Corporation, "A local workforce has a good network in the local market and Indian IT companies can make deeper inroads abroad by hiring locals. Many MNCs already have a good front-end (their marketing and sales operation) in global markets and come to India to build a stronger back-end (to enhance their technical expertise). While Indian companies already have a strong back-end in India, they need to develop their front-end to project themselves in a better manner in the international market." To do that, Indian firms need to hire locals.

For a product company, it is important to have a thorough understanding of the local market to tailor its product to customer needs. Product development teams need to be briefed regularly by their marketing counterparts so that they can fine-tune their products. A local workforce can be instrumental in achieving that goal. Shrivastava adds, "Sometimes we get locals with wide experience in product companies [operating in that market]. They bring the knowledge of those product companies. This helps us add value to our products during the development stage."

Less resistance overseas

It is the path of minimum resistance. All an Indian company has to do in order to be accepted abroad is to hire a local workforce of people who speak the same language and are familiar with the business practices of that particular country. Netkraft CEO Anand Sudarshan says, "By hiring locals, a company contributes to the overall economy of a country by providing employment to its people. It emerges as a citizen-friendly corporate entity, which in turn betters the prospects of the company in that market." Apart from this, the comfort level of local customers increases manifold when they approach an Indian company having a local workforce. For instance, TCS (it has 1,000 foreign workers on its rolls), which has set up its development centres in different parts of the world—including Uruguay, Hungary and China—has employed a local workforce in all of them. A TCS spokesperson explains, "The need for setting up our centres in different countries arose so that we could remain in close proximity to our customers. By hiring a local workforce at our development centres we have been able to win the confidence of our local customers in different countries."

By hiring locals, a company contributes to the overall economy of a country by providing employment to its people, says Anand Sudharshan

Maintains diversity

The time has come for Indian companies to portray themselves as truly global players with a diverse and heterogeneous workforce from different parts of the world. Sudarshan of Netkraft says, "Now that Indian companies have started looking beyond the US for business opportunities, they need to maintain a certain amount of diversity while dealing with their customers. In countries like Germany, it is almost impossible to make headway in business without having locals as part of your team."

TCS has regular knowledge sharing sessions amongst its workforce across locations and geographies. The company has a training centre in Thiruvananthapuram where employees from Uruguay and Hungary attend training sessions during which they share their experiences. This, TCS believes, brings diversity to its workforce. Product companies like Talisma have interactive sessions amongst their workforce. Talisma has around 60 locals working at its overseas offices in the US, UK, France and Italy. Companies use conference calls and video-conferencing sessions for added interaction.

Cost-effectiveness

Does hiring local employees in a foreign country work out to be an expensive proposition? Maybe, maybe not. Most companies have to maintain parity with regard to the salary they offer to their employees who are working at different locations, whether foreigners or locals. They cannot afford to pay less to an Indian worker sent to a foreign location than the market standards in that particular country. The cost incurred in sending and accommodating an Indian sometimes tends to be more than that incurred while hiring a local worker abroad. Says Sudarshan, "Some local workers may come at a slightly higher rate than their Indian counterparts but in the long run the business, which a local workforce will get for an Indian IT company abroad, will justify all the costs incurred on them."

Rising numbers predicted

Many believe that there will be a steady rise in the number of local hires made abroad by Indian IT companies. But much will depend on the business model of a particular company. If a company wants to be portrayed as truly global it will have to embark upon a policy of hiring locals. This will better its business prospects abroad and bring in diversity. Highly skilled and qualified people are attracted toward well-established corporate brands. Indian companies looking to rope in locals abroad will need to change their approach and be global-centric rather than parochial. Recent visa issues, which are aiming to restrict the movement of Indian workers to foreign countries, might also fuel this phenomenon. One thing is clear, we can expect to see more locals at overseas locations of Indian IT companies in the coming months.