Global lender HSBC Holdings expects to add about 5,000 staff in India over the next 12 to 18 months, and is building up its business serving domestic retail customers as well as small and medium-sized companies, the bank’s India head said.
Naina Lal Kidwai, India country head of HSBC also said the bank would decide in the next two or three months whether to enter the retail brokerage business in India, where its net profit rose 64% in the fiscal year that ended in March.
Kidwai said that India Investment Summit on Thursday that HSBC had stepped up its focus on smaller business customers, who were driving a lot of economic activity. “It’s also where the growth of India comes from, with 60% of India’s manufacturing and exports coming from the SME (small- and medium-sized enterprise) sector. Is this a sector that we can ignore?”
Vodafone to outsource jobs to IBM
Mobile phone giant Vodafone Essar will outsource its entire IT operations to IBM India in a bid to cut costs and develop its business in India, Vodafone announced ahead of an India Investors Day in London.
“This agreement further demonstrates our continued focus on scalability and cost control, key criteria for success in the Indian mobile market. In IBM, we have chosen a global partner committed to the industry and with a proven track record in the region,” said Asim Ghosh, managing director of Vodafone Essar.
“We are confident this will deliver cost efficiency as well as an enhanced service to our customers,” he added.
The move follows the formation of a new cell phone tower business company by Vodafone Essar, Bharti Airtel and Idea Cellular, which is aimed at providing infrastructure to all mobile telephone operators in India.
The five-year agreement aims to ensure scalable, flexible and resilient IT support for the fast-paced roll out of new network infrastructure, keeping pace with the rapid growth in Vodafone Essar's customer base.
At the same time, the agreement is expected to lead to the faster roll-out of more varied services to customers, while delivering greater cost efficiencies to Vodafone Essar.
Under the deal, IBM India will assume responsibility for the management of all Vodafone Essar's IT operations with the exception of network service platforms, spanning both hardware and software.
The agreement will encompass the management of IT services, including the development and maintenance of key applications such as billing, business intelligence and financial systems.
IBM India will also manage other internal IT services for Vodafone Essar such as data centre operations and IT help desk, including desk site, while supporting key areas such as security and change programmes. Vodafone Essar will continue to retain full strategic control of its IT requirements.
London-based investors -- addressed by Vodafone Chief Executive Arun Sarin, Ghosh, Vodafone CEO for the Emapa region Paul Donovan, Vodafone Essar CFO Andrew Davies, CTO Naresh Gupta, and CMO Harit Nagpal -- were given a detailed presentation of the Vodafone Group's India operations.
Sarin and Ghosh told investors that they did not expect state-owned Bharat Sanchar Nigam (BSNL) to pose any challenge to private players in India's rapidly-growing mobile phones market.
Sarin said he expects consolidation in the market after the new spectrum policy has been announced by the government.
“Six to seven players is one to three too many,” he said.
European high-tech sector needs Indian talent
Bernd Voelcker desperately needs programmers and sales managers for his software firm in Berlin, but he can't hire promising Indian or Chinese candidates because Germany's labour market has shut them out.
For his company Infopark, the situation is getting critical. "In November, we had to refuse a contract for the first time," Voelcker said. "We are trying to farm out tasks and to get our clients to wait. They are not happy, but they accept because it's the same everywhere."
With 13 vacant posts of a total 80, Infopark is far from being an isolated case.
There are roughly 43,000 jobs going begging in new technology sectors and "losses can be calculated in billions," according to August-Wilhelm Scheer, president of the sector federation Bitkom.
Infopark and companies like it have made concerted efforts to attract qualified personnel.
"We pay well, there are bonuses, the atmosphere is nice and informal, and we have even thought of setting up a day-care centre," Voelcker said.
But owing to an unfavourable demographic trend and growing disinterest among German students for scientific studies, the labour pool for programmers, telecommunications engineers and computer security specialists is emptying out.
A near-term solution would be "to allow, even stimulate immigration of highly qualified people," said Infopark's boss, who would like to hire programmers from India and China.
Scheer, meanwhile, calls for "minds of the world to come and help us." Some European countries have taken initial steps to meet similar shortages.
France has approved, though not yet issued, work permits for specific talents or abilities to assist professional immigration.
At the European Level, a "blue card" based on the US "green card" model is being developed to attract skilled workers from all over the planet, but is still some way from fruition and is opposed by German authorities.
In Germany, measures enacted early this decade specifically for high-tech sectors allow for limited immigration but are extremely restrictive.
Candidates must present a work contract with an annual salary of 85,000 euros (125,000 dollars), almost three times the 30,000-35,000 euros that Voelcker pays entry-level programmers.
Sector leaders meeting in the northern city of Hannover this week hoped the government of Chancellor Angela Merkel would make a gesture in their favour, by lowering the minimum salary level for example.
But Merkel and Economy Minister Michael Glos have made it clear that with more than three million unemployed German workers, their priority is at home.
"The first step is to qualify the domestic workforce," the German chancellor has said.
That would involve reforming how scientific subjects are taught to make them more attractive, in particular for women, and by making it easier for women to work by providing care for their children.
Retraining workers and the unemployed, in particular older Germans, is another priority for Merkel, who has many ideas on how to resolve the long-term question of unemployment.
Voelcker agrees but says they would not resolve short-term problems. The issue is not one faced just by high-tech companies, furthermore. Germany's key industrial sector is said to lack around 50,000 engineers, and a study has determined that overall, labour shortages cost the biggest eurozone economy around 18.5 billion euros per year.
IT firms to hire more despite dollar meltdown
Dollar meltdown, rising rupee, sub-prime crisis, high attrition! Year 2007 has been a rollercoaster ride for the Indian IT industry. While some continued to grow despite hiccups, others have reported lower margins. On the positive side, the sector generated enough jobs - accounting for more than half the jobs created by Indian industry in the last fiscal. Salary growth, which varied between 12% and 15%, was not bad either.
But 2008 could be a different story, at least when it comes to hiring. Indeed, many IT and ITeS companies have already drawn out their hiring plans for next year. Accenture India whose headcount crossed 35,000 this year, says it will continue to grow 30-50% annually. Capgemini India, which currently has 17,500 employees, will raise the number to 40,000 in three years.
Birla Soft says they expect to add another 1,500-1,700 people across various levels in 2008.
''There are never enough good people. The net addition this year was higher than last year. Our campus intake was 600 this year and we are looking at 1,000 next year. Even at the senior and middle management levels we are hiring aggressively,'' says Narendra Puppala, senior VP (global HR), Birla Soft.
Cisco too plans to stick to its hiring target. ''The company has a target of having 10,000 people in India in the next three to five years and that is on track,'' says Subash Rao, director (HR), Cisco India.
Wipro echoes the same mood. ''We had announced 14,000 offers to freshers in 2008-09 and we are on track,'' says Pradeep, V-P Strategi Resources, Wipro Technologies.
However, not everybody shares the same optimism. A recent study by Assocham revealed hiring by IT companies have slowed and employment outlook for the current fiscal is not as encouraging as it was last year. Patni Computers for example, recruited only 60% of their target numbers this year. The picture may not change too much next year.
''The overall business model is undergoing a change. With pressure on margins, we are looking at the productivity and employee pyramid ratio. The flatter the pyramid lower the costs,'' Deepak Khosla, senior V-P (marketing and head) APAC and Japan, Patni Computers. The company hired around 1,800 people across the board this year, 40% below target and the situation may not change too much next in 2008.
Noida-based company, InterraIT says they have an aggressive growth plan for 2008 and recruitment number will be equally aggressive. ''We will resort to just-in-time hiring to keep the bench strength to manageable levels,'' says Asoke Laha, president, MD, InterraIT.
Experts say, the trend among IT software firms may be slightly different from others in the sector. As Rajeev Mehtani, MD, NXP Semiconductors India, a chip manufacturing firm, says their recruitment will depend on how the chip business goes worldwide. ''This year too our salaries grew by 12% and hiring was on target. That will not change next year.''
Some say, since the dollar meltdown started in July-August 2007, most IT companies did not feel the pinch this year. Things may change somewhat next year. ''Hiring will remain low but will pick up by mid-2008 when IT firms have wrung out the slack in resource pool. There will be much more focus on recruiting the 'right fit' and better utilisation,'' says Arun Jethmalani, CEO, Valuenotes.
However, the basic business model is expected to remain robust. As Mukund Menon, global head, talent acquisition, Satyam Computers explains, ''2008 will be wonderful year from the opportunities perspective. Most Tier I IT firms will be 50,000 plus employee organisations. There will be greater emphasis on entry level talent and firms will engage with colleges and universities to build talent.''
