Sunday, July 22, 2007

Indian Job Market 2.0: 4:1 or 1:4

I was talking to a friend of mine who happens to be the Director of Engineering for a Tier 2 software product development company. We were discussing the job market in India when he made a rather surprising statement. Remember in the Web 1.0 era when a lot of tech companies were moving to India in order to garner significant cost savings and always mentioning the 1:4 rule where you could get 4 people in India for the cost of 1 in the US. The law of numbers ruled the day. The companies moved a good amount of the support functions like product support, quality assurance etc but still retained R&D in the US. With time the bean counters decided that the law of numbers could work for product development as well. This resulted in a significant amount of development work moving to India. However as per my friends observation this is not working out so well for the following reasons.
1. Talent for specialist with domain knowledge doing core product development is .very scarce.
2. Tier 2 software companies find it extremely hard to attract talent given the stringent competition they face with the Google's, Yahoo!'s, Cisco's, Microsoft's and Oracles's.
3. They end up hiring generalists hoping to train them. These generalist however end up being job hoppers who cannot be reined in with Stock options. These day hardcore cash is the only talk that sells.
4. Offloading work on the critical path of a release is still something many companies are not willing to experiment with. Apparently doing so puts the project at a very high risk.

Given these limitations my friend said he preferred getting 1 person in the US rather thn getting 4 people in India. I thought this was very interesting though not sure if this was an isolated experience or more of a general trend.

1 comment:

Anil said...

I agree with your friend, and have been commenting on it since the "coolie culture" began.

I guess Indian Cos and the Research Firms are to blame for it partly and partly a function of evolution of the Industry in India.

Socially, a very large %age of Indian engineers are happy to get the packages they get with IT Services companies and the first reaction is to ensure they are out of the daily grind for survival that India provides. Like buy a house, get a car, get married, help your siblings etc.

By the time they achieve this, there is very limited energy left for taking on challenges at work.

IT Services companies have ensured that we have groomed a generation of engineers that look for guidance and will deliver what the client asks them to deliver. Again a vast majority simply lack the approach that is required to building products, architect solutions, innovate based on understanding of business, culture & communities. While all the pertinent verbiage abounds, unique or deeper understanding is a challenge. Also, they are the new aristocrats and hate to learn otherwise, happy in their blissful environs. Peer interaction is limited and the domain of a disgruntled few.

Additionally, finding globally relevant problems are an issue. In India the problems are about afford-ability, inclusion, etc. So innovators think about solutions to these problems as against challenges / feats that excite a western audience (like Web 2.0 off late)

There haven't been super large payoff's because of business success. The ownership structure is predominantly founders and investors. So no one understands stock options well enough. The Infosys story is not a very good example for various reasons.

That said, there is a new breed of youngsters appearing:

They know they will get a job

They know they will buy a house

They know they will fall in love or get married traditionally

All the above is mundane for this group.

Where do you find them, Look for Bar Camps, Online non tech communities, commentors on interesting blogs, & other such exciting places. Youngsters on the verge of joining the workforce. For these folks learning Java or C is not the challenge finding something interesting to do with their time is!

With every passing year their tribe is growing. A %age of this crowd is not interested in working for the Infosys, IBM Accenture crowd. They are looking for more interesting places.

Also, if you are paying 20-30% below the Google's you are within acceptable employer range. Do not Hard sell stock options as quiet a few have had or heard about the 95% experience of owning stock in unproven companies.