Indian IT firms in US defeat American peers in job creation

by Sohini Bagchi    Jul 25, 2013

INDIANIT

Indian IT firms in the US have overpowered their American counterparts in job creation. At a time when companies such as IBM and Accenture are planning to cut down their workforce, Indian IT companies in the US are optimistic about their recruitment numbers. Reportedly, Indian companies in the US have also enjoyed a much better track record in the last 5 years when it comes to talent creation and recruitment.

According to a recent Nasscom report, Indian companies across industry generated more than 280,000 jobs in the United States, Even though overall unemployment in the United States remains extremely sluggish. The U.S. government figures show investments from India to the US grew by 90 percent over the past five years.

The Indian IT industry paid more than $15 billion in taxes to the U.S. treasury from 2007-2012, according to the report. In addition, the report found Indian technology companies have invested more than $5 billion through 138 acquisitions, sustaining thousands of jobs in the United States.

In contrast, global software giant IBM’s US headcount is estimated at 91,000 for 2012, down sharply from 13 lakh in 2005, according to an IBM data. In contrast, IBM added 1 lakh people since 2006 in its overseas offices. Its strength in India grew from 36,000 in 2005 to an estimated figure of 150,000 in the current year. The employee strength in Accenture’s US offices was also very marginal, with headcount growing from 32,318 in 2008 to just 38,000 in fiscal 2012, adding its headcount in other places and the company is bullish on Indian market.

“India continues to remain a primary destination for global delivery and it’s not surprising to know that US companies are adding headcount here,” Siddharth Pai, partner and president of Asia Pacific, ISG told Economic Times.

Of course all is not well for Indian firms as well too. Experts believe the proposed US immigration bill has certainly hit the IT job in Indian companies. Furthermore, a survey by Info Edge India revealed that the IT-Software, BPO and ITeS witnessed lower recruitment activities in the first quarter of 2013 compared to last year. For example, TCS added just 1,390 employees, the lowest in its last 15 quarters. Infosys too is not upbeat on hiring. As Hitesh Oberoi, MD and CEO, Info Edge India points out, “The macroeconomic environment is still not very robust and the pattern of job creation has been quite symbolic of caution … taking cues from the weakened global economic parameters.”

However, Indian IT industry has repeatedly helped the US economy from setting up innovation centers to driving next-generation technology development and coming up with innovative solutions to offer US citizens improved  public services, health care systems and other products at affordable rates.

Of course the US Immigration Bill may Indian IT companies. However, Sundararaman Viswanathan, Manager, Zinnov Management Consulting notes the challenge is short lived. “This move can offer interesting opportunities in the Indian market. Indian IT service providers should look at hiring overseas students who graduate out of US universities thereby expanding their pool in terms of H1,” he says. He believes that these companies could become real MNCs in the long run, adding more locals to their global workforce.