INDIA--The U.S. subprime crisis has led to an increasing number of Indians who had settled abroad, but are now eager to return to their homeland. However, IT companies in India are getting picky about who they hire.
"Three and a half years ago when I joined Duke University, after being a tech CEO, almost all graduating engineering students from India wanted to stay in the U.S. permanently, and about 60 percent wanted to be investment bankers," Vivek Wadhwa, executive in residence at Duke University's Pratt School of Engineering, told ZDNet Asia in an e-mail interview.
"I have spoken to about 20 from the current class [and] more than half want to go back to India--they see more opportunities there. And, hardly any want to become investment bankers. They want to start tech companies," Wadhwa said, who was founder and former CEO of Relativity Technologies, and is currently based out of the U.S. university's campus in Durham, North Carolina.
Navnit Singh, partner at executive search firm Heidrick & Struggles, said in an e-mail interview that the financial meltdown has "certainly accelerated" the trend of Indians, settled in the United States, wanting to return home.
Overseas interest waning
Over the last five years, returnees have helped enrich the country's IT landscape, bringing rare and much-needed skills to India. According to Nasscom, trade body and chamber of commerce of the country's IT-BPO (business process outsourcing) industry, between 2005 and 2006, over 30,000 immigrant Indians worked at different R&D captives.
Growth opportunities, better amenities and pay packages had lured Indians settled overseas to return to their homeland.
Today, however, the picture is not all that rosy. "Companies don't seem interested in hiring returnees any more," Wadhwa noted, whose recent study How the Disciple Became the Guru looked at how Indian IT companies learned to compensate for deficiencies in its education system through workforce training and development.
"There was a time that NRIs (non-resident Indians) were in great demand. Today, most companies prefer domestic talent who, they say, are better trained and have less of an ego problem than the NRIs," he said.
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According to Wadhwa, companies in India have overcome a severe talent crunch by providing extensive training to their workforce. The implementation of management development and training programs has also produced highly-competent managers.
"Headhunters say that if someone has been abroad for more than seven years, they are not considered employable in the Indian industry anymore," Wadhwa said.
K. Sudarshan, managing partner at EMA-Partners India, concurred: "If someone has been abroad for the last eight to 10 years, it becomes very difficult to take them on [because] India has changed so much in the last five years."
Wadhwa added: "Even in executive management, returnees are not favored anymore."
Companies are, however, happy to hire returnees if a global role is involved.
Sudarshan said in a phone interview: "If they want to come to India, companies ask two important questions: whether their work experiences will be of any value here, and whether they require a global perspective here."
Today, skills and ability of locally-developed talent seem to be in greater demand than the skills of returnees. "All of the companies we spoke to for our study said they were receiving an increasing number of resumes from abroad. But, they are not as interested in these NRIs as they used to be," Wadhwa said.
The arbitrage opportunity for India is also shrinking, and other economic issues including the high cost of hiring people, high real-estate costs and rising fuel costs, are all adding up. As a result, even in terms of remuneration, Indian working overseas no longer have bigger pay packages than locals.
Singh said: "Salaries worldwide are pretty much the same and there is not much of a differential at the senior levels."
Sudarshan added: "People from other nationalities are also eager to come to India and the Middle East."
Panic amid U.S. credit meldown
To add to NRIs' job woes, the recent crash of major global investment banks has sent a wave of panic among banking executives in the West. In fact, many headhunters across India are being flooded with calls and resumes from executives willing to return for work in the country.
Sudarshan said: "In the financial services industry, there is definitely a lot of desperation amongst Indians settled in the United States. But, people are still waiting and watching."
"[However], if they choose to come here, they will have to make heavy compromises on salary and bonuses," he said.
Wadhwa expects mass layoffs in the U.S. financial services sector in coming months According to the U.S. census, 80 percent of Indians settled in the United arrived after 1980. A large chunk of them do not have green cards, and are working off temporary visas.
"When these Indians start getting laid off, they will have two things to worry about--losing their job and making ends meet, and their visa status," he explained. "I expect that thousands will have to return home to India."
This may prove to be a big gain for India as its financial services industry is just picking up steam, and hiring experienced talent will make these Indian companies more competitive. "As the American financial services industry recovers, it will look to reduce costs. And what better way than to outsource jobs to ex-employees who have returned home and now cost 50 to 80 percent [what they used to]," Wadhwa said.
Swati Prasad is an IT writer based in India.