Indian Outsourcing

According to The New York Times, workers in India's outsourcing industry are currently receiving pay rises which average 10% per annum, as demand for talent is at a record high.

Outsourcing companies in the country, however, are currently seeing attrition rates of between 15 - 30%, compared to 10% attrition in outsourcing companies in Eastern European countries 10%, and between 7.5 - 15% in China. The newspaper quotes Diana Farrell, director of the McKinsey Global Institute, an economics research firm, who said that 'high turnover, rising wages and a shortage of suitable talent in India's most popular offshoring destinations are proving to be bottlenecks'.

India is said to be blessed with some 3 million students who graduate each year - yet only 30% of this pool is thought to be immediately ready to enter the labour market and undertake roles in the country's lucrative outsourcing industry. So, with high attrition rates and a labour market which is struggling to keep up with demand, Indian outsourcing companies are having to become more sophisticated about the way they retain their staff. Infosys, for example, was the first Indian company to introduce an employee stock plan. CEO Nandan Nilekani has said that 'we have developed systems for hiring, training and retaining emplyees like an elaborate science'.