On May 02, Infosys, India’s second largest information technology (IT) company, announced that it will hire 10,000 American workers over the next two years. Three days later, on May 05, Nasdaq-listed Cognizant Technology Solutions, which has a large presence in India, also revealed plans to significantly ramp up hiring in the US. if and when they do end up attracting talent, Indian IT companies may have to pay through their nose for it.
“Those skills and expertise will be very expensive. They will end up getting a lot of college kids, who they will end up spending a lot on training,” said Sanchit Gogia, Chief Analyst and CEO of Greyhound Research. “So, in fact, the cost of operation will increase.”
Still, Gogia reckons that the increase in the cost and complexity of doing business will shave between 5% and 10% off the margins, year on year, for Indian IT companies. It’s hardly propitious timing, given that India’s three biggest IT companies are lagging average industry growth, and haven’t quite been able to deliver on expectations.
Gogia’s bigger concern, however, is that Infosys’s pledge to hire a certain number of US workers could eventually corner other companies in other key geographies. “Committing a number was not the right thing to do in my humble opinion,” he explained. “Because today they’ve done this in the US, tomorrow it’ll be the EU and then it’ll be Australia. And it’ll also add pressure on their peers like TCS, Wipro, and Tech Mahindra, who will be expected to follow suit.”
“Apple comes to India and says we’re going to invest $3 billion,” said Gogia, offering a corollary. “They never say we’re going to hire 50,000 people.”
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Sanchit Vir Gogia: Sanchit is the Chief Futurist, Founder & CEO of Greyhound Knowledge Group, a Global, Award-Winning, Digital Transformation Research & Advisory Group. He also serves as Chief Analyst & CEO of Greyhound Research, an Award-Winning, Global, Independent Technology Transformation Research & Advisory firm. To read more about him, click here.
Anshoo Nandwaani: Anshoo serves as a VP and Principal Analyst with Greyhound Research, an Award-Winning, Global, Independent Technology Transformation Research & Advisory firm. She also serves as Chief Human Resources Officer (CHRO) of Greyhound Knowledge Group, a Global, Award-Winning, Digital Transformation Research & Advisory Group. To read more about her, click here.
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