Outsourcing

Indian Companies Are America-Bound


Indians -- including outsourcing workers hoping to go to the U.S. -- petition Lord Vishnu

Photograph by Sanjit Das for Bloomberg Businessweek

Indians -- including outsourcing workers hoping to go to the U.S. -- petition Lord Vishnu

The southern Indian city of Hyderabad is home to the 500-year-old Chilkur Balaji Temple, which features a statue of Lord Vishnu, the Hindu deity. The monument has become a magnet for workers such as Ravi Shanker, who seek divine help in securing a work permit from Washington, D.C. Shanker, who lives in Bangalore, works for Kodiak Networks, a telecom services company in Plano, Tex., and the company needs him stateside to help its client AT&T (T) develop software. “A visa is not under my control, my employer’s control, or my country’s control,” says Shanker. “The only way to change my luck is through God.”

With the Obama administration applying tougher standards for H-1B and L-1 work visas in an effort to protect jobs at home, Indian companies aren’t relying on prayer to staff their U.S. operations. Instead they’re hiring tech workers who are American citizens or hold green cards. They’re facing pressure by their American clients, which spent $27.7 billion on outsourcing services last year, to move some operations from India to the U.S. for faster customer support.

With jobs and outsourcing such hot political issues in the U.S., it pays for Indian companies to hire some Americans, even though they’re more expensive. Companies that want to win contracts with state and local governments need at least some work to go to local hires. “A lot of us want to be seen as generating employment in the U.S.,” says Lakshmanan Chidambaram, senior vice president (Americas) at IT services company Mahindra Satyam (SCS:IN).

In September, Bangalore-based Infosys (INFY) acquired Marsh Consumer BPO, an outsourcing company with 87 workers based in Des Moines. In June rival Mahindra Satyam opened a new outsourcing center in Fargo, N.D. Cognizant Technology Solutions (CTSH), a company headquartered in Teaneck, N.J., that has most of its 145,000 workers in India, acquired centers in June in Des Moines and Minot, N.D., employing over 1,000 people. Even with U.S. unemployment at 7.8 percent, Indian executives say they have difficulty finding skilled tech workers. Two years ago, Cognizant began recruiting software developers at 17 American universities to reduce its reliance on employees from India on short-term visas. Cognizant added 4,000 workers in the U.S. between mid-2011 and mid-2012 and would like to do more hiring, says President Gordon Coburn. “There’s not enough tech talent in the U.S. to meet the need,” he says.

Tata Consultancy Services (TCS:IN) used the social network site CareerBuilder to find Darlene Black, 54, from Ann Arbor, Mich., who had worked for Parke-Davis and Pfizer (PFE) for 18 years. She applied on a Sunday and by Friday had a full-time offer to help a TCS client manage contractors and other construction-related work. “They are getting people [into] the workplace here in the U.S.,” says Black.

Indian companies have also expanded their talent hunt beyond well-known tech hubs. Bangalore-based MindTree (MTCL:IN), an Indian outsourcer with 11,000 employees, is opening its first U.S. software development center in Gainesville, Fla. MindTree has 100 engineers in training, with plans to increase its U.S. headcount to 400. It chose the location to be close to the University of Florida and has promised the state government it will invest $2.5 million in the region. In return, it will get tax abatements from the state and help to cover the cost of training new employees. “It takes state aid to make the business model work,” says Scott Staples, president of MindTree Americas.

Back at Chilkur Balaji Temple in Hyderabad, Google (GOOG) employee Narendra Sripal, who wants a visa to travel to the home office in Silicon Valley someday soon, has asked Lord Vishnu for help. The realist in him thinks it will take some time before Washington eases up on work permits. “I’m not even sure if God could convince the U.S. to change its visa policy,” says Sripal.

The bottom line: Indian firms are hiring U.S. staff to serve clients, which spent $27.7 billion on outsourcing in 2011.

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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.
Mehrotra is a reporter for Bloomberg News in New Delhi.

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