Indian talent on the move – how can global mobility help?

Indian IT sector – A global powerhouse

India has earned a well-deserved place for itself in the global information technology market, largely driven by a quality talent pool of technology professionals. The Indian education system, though stressful, also has become streamlined to create a world-class I.T. workforce. Indian engineers are in demand all over the world. Accounting for 7.7percent of the GDP, the IT-Business Process Management sector has played a significant role in driving India’s socio-economic growth. Indian I.T.-B.P.M. industry revenue was estimated at around US$ 191 billion in 2020 and is estimated to grow to US$ 350 billion by 2025.

India made up 18.5 percent of the total global I.T. spend in fiscal year 2020. However, India had modest beginnings in the I.T. space. Infrastructural issues in the early 80’s hampered software development in the country. The government formulated a new software policy that allowed for greater participation and hassle-free trade. As a result, the sector witnessed an exponential growth in the post liberalization economy of the late 1990s. In the 1990s, the industry started off with an export of nearly $100 million with around 5,000 employees. Now it is an industry that thrives globally, and India’s I.T. exports are now around $ 136 billion with 4.3 million employees working in this sector.

Indian talent on the move

India is the world’s principal sourcing destination with the largest qualified talent pool of technical graduates in the world. The country has the low-cost advantage, being 5-6 times less expensive than the U.S.A. With an abundant talent pool and low-cost advantage, it was only a matter of time until Indian I.T. companies expanded their operations, span and business globally. With the increase of on-site roles/projects of client organizations in the U.S.A., Europe and other locations in APAC, Indian I.T. companies have ramped up talent deployment over the past three decades. This has made the volume of talent moving out of India larger than inbound expatriate traffic into India.

Holly Creed, global mobility manager at DXC Technology is seeing how mobility from India into Europe and the U.S.A. is changing approaches to global mobility. “It’s quite clear there is a large shift in talent and more companies are looking at India. Not just as a country to outsource back-office functions, but as a source of talent and potentially a future workforce,” said Creed while speaking at a panel discussion organized by Relocate Global.

In the U.S.A., across multiple states, Indian nationals accounted for the third or fourth largest population. Among Asian Americans which constitute 7 percent of the entire population of the country, American Indians are the second major origin group accounting for 4.6 million people.

Relocation companies manage globally mobile populations out of India and inbound to the U.K. There is a high demand for skilled people from India in the U.K. and a shortage across most industries, including healthcare, but particularly in I.T. This means employers must get talent mobility right to remain competitive.

Relocating individuals inbound from India tend to be highly educated, young professional people and most of them would be on their first assignment outside India or their home city. This young group therefore requires a lot of help to settle-in their new environs. Employers and global mobility service providers have important roles to play in helping these assignees settle-in.

While self-managed and business travelers are the core of India’s outbound mobile population, there is a shift in attitude towards asking for more destination and financial support.

“A few years ago, you could easily get someone outbound from India to go with a package at the threshold for immigration, but now there is pushback. We are being asked for accommodation and education support and destination services – your typical expat benefits,” said Creed.

HR and global mobility response to changing trends

Support which includes country-and city-specific policy provisions is particularly important for Indian nationals. This is especially the case in the U.S.A., as they are often on home-country salaries and need additional allowances and benefits in kind. “This is alongside the higher level of hand-holding required,” continued Creed. “DXC Technology is already responding to the challenges in changing the level of support it offers. Recognizing that in an age of cost-control, investing more upfront in the global mobility offer makes sound business sense.” Creed has convinced the company’s leadership to revise its packages upwards for Indian outbound talent – with positive results for both the company and assignees. “We’ve found that now we’ve started adding more, our retention is actually increasing and we’re seeing employees who are a lot happier.” she explained.

Global mobility providers, employers and assignees need to work ever more closely together and with agility to establish the foundations of a successful relocation in a short timeframe. Mobility service providers need to stay in close touch with the H.R. department, so they are in sync with the expectations of the relocating employee.

Covid-19 and the impact on Indian I.T. industry

Given the Covid-19 pandemic, numerous companies around the world have adopted strategies to find alternative supply chains vis-à-vis China. China Plus One, also known simply as Plus One, is the business strategy to avoid investing only in China and to diversify business into other countries. For the last 20 years, western companies have invested in China, drawn in by their low production costs and large domestic consumer markets. The advantages of the cheap labor and market demand that China initially provided has increasingly been overshadowed by the advantages that ASEAN countries can provide. These benefits include cost control, as workers in Southeast Asian countries are generally less expensive than Chinese employees, risk diversification, and new market access into economies. Add to that the political and social risks in the Chinese transitional economy and the outlook for investors look grim. Multinational corporations have been looking at countries with stable governments such as India, Vietnam, Indonesia, Malaysia, Thailand, Philippines and Bangladesh.

Following the tensions between China and the US on the trade front, many global corporates including Indian companies are building bases to shift out of China. Indian auto component manufacturers and pharma companies are shifting production bases to India and relying on local vendors for components. Indian technology companies such as Concentrix (and other I.T. companies) have set up operations in Vietnam and Malaysia, Indonesia. This adjustment in strategy has led to more talent moving out of India to South East Asian countries.

How can mobility companies help?

As described in this article, self-managed and business travelers are the core of India’s outbound mobile population, however, there is a gradual shift in attitude towards asking for more destination support. India’s much admired tech talent now understands their value and the expected support goes just beyond moving support and orientation tour at the destination. Employers and mobility service providers must be increasingly in sync with employee expectations to retain talent. Assignees from India unlike earlier days prefer home finding services, school search, settling-in services, immigration & visa support to go along with their package. This phenomenon has also been a result of a shift from single person assignment to families now moving along with the assignee.

With the pandemic now forcing most companies to consider alternate ways of working, remote working and virtual assignments have become a reality. Global mobility professionals and the local H.R. usually find themselves seeking answers as they go about designing remote work policies. Factors such as eligibility criteria to the very definition of remote work, from compensation strategy to the company’s obligations need to be considered. Having to consider aspects from compliance risks like Permanent Establishment (PE) to tax and immigration nuances, isn’t easy in this ‘newer’ way of working.

We can help

Mobility’s value to business relies on knowing what’s going on in the world and in the corporate moving industry.

Informed by industry insight and many years of experience, our consulting practice can help you create the right structures so that your mobility program delivers business advantages.

Policies and the choice of supply chains can impact both talent and financial performance. With sharper visibility of these factors, we will help to continually refine your program to achieve your business objectives.

To know more about our services, please contact us about your business’s mobility needs.

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