Big Six Outsourcers on a Passage to India

Ann All

Hot on the heels of a TPI report that Indian outsourcing firms like Wipro, Tata and Infosys are taking market share away from the so-called Big Six -- Accenture, IBM, HP, ACS, CSC and EDS -- comes news that Accenture plans to add 8,000 employees in India this year, bringing its total headcount there to 35,000.


As most articles about the move have hastened to point out (many in a "what is this world coming to" tone), this means Accenture will employ more workers in India than it does in the U.S. (30,000).


While 35,000 is a big number, it's significantly less than the 43,000 folks that IBM, another multinational member of the Big Six, employs in India. IBM has ramped up quickly, more than quadrupling its staff in India over the past three years.


To compete effectively with their Indian rivals, IBM and Accenture realize, they must utilize some of the same low-cost models. This means employing Indian talent in India, where employees can provide expertise in both the front and back offices.


It works both ways, of course. Infosys employs 200 consultants in Silicon Valley to augment its workforce of 1,800 consultants in India.


As the economy becomes more global, so do workforces. Companies that ignore this fact will fall behind more forward-thinking firms.


An added note: Hiring competition from big firms like IBM and Accenture will worsen the wage inflation already being keenly felt in India, and thus take away some of the labor price advantage the country enjoys.

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Feb 1, 2007 4:18 AM Harpreet Harpreet  says:
Well the average cost of workers in India ( direct wage) including all levels of management works out to be some US$ 7000 currently, vs a US$ 55000 in the U.S.Even if over the next 2 years  wage in India grows 50% across the board, at 10,500 it is still a fraction of the U.S Wage. European Union wages , specially Germany and France are even higher. Add to that lower rents, higher productivity, and lowering telecom costs that are offsetting the wage cost, Off shoring still would retain it's advantage in the near future.Harish - Mumbai Reply
Mar 29, 2007 12:30 PM Edward Edward  says:
With the massive growth of "NEW" jobs in India to support operations back in the USA, all I can think of is.... who is going to pay for our Social Security, Medicare, Federal Tax and local income taxes?It seem the main incentive and attraction to Outsource jobs Offshore to places like India is the combination of low salaries and the avoidance of Payroll Taxes here in the USA.Funny, if you Outsource a job out of New York City to North Carolina, the employee in NC has to pay Federal, State, Social Security and Medicare tax......But...if the assignment is Outsourced to India to support Operations in New York City, the companies avoids all Payroll Taxes in the USA. This practice of replacing workers in the USA with workers Offshore in order to save money by avoiding the payment of taxes in the USA is going to be an issue for the 2008 elections. We cannot expect to Offshore as many Jobs as we can without if having a profound effect on our economy and the Middle Class. Remember folks it's those salaries that employees earn in the USA that pump our economy. The only fair and quick solution to help recoup the lost tax revenues is to impose a Sales Tax on any Service that is supporting Operations in the USA from an Offshore's only fair! Reply

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