Outsourcing truly seems to be on its way out in India, and onshore sourcing is the way to go in the future, going by a new study released by technology research company Gartner Inc.
India's top software service companies will triple direct hiring in the US by 2016 while also significantly increasing their presence in European markets, Gartner Inc. said in a report, said Mint.
"We estimate that top Indian information technology companies' onsite recruitment currently in the US to be about 18,000, and we expect this to triple in the next three years," said Partha Iyengar, vice-president and regional research director-India for Gartner India Research and Advisory Services Pvt. Ltd.
On-site or onshore hiring refers to Indian IT companies recruiting people directly in the clients' countries, as different from deploying people hired in India to clients' offices abroad.
By 2014, IT hiring in large western markets will predominantly be done by Asian-headquartered companies enjoying double-digit growth, Gartner said. These companies can take advantage of the opportunity to expand into these key markets, but will need to increase their onshore presence in part through local IT hiring, it added, said the Mint report.
Onshore hiring in western European countries is likely to be dictated by protectionist policies expected to be adopted by those nations, Gartner said, adding European Union directives will drive legislation to protect local jobs, reducing offshoring by 20% through 2016.
The US and Europe account for about 80% of the market for India's top information technology (IT) firms. With western countries keen to protect local jobs amid a continuing slowdown, Indian firms are increasingly hiring people directly in the clients' countries.
Non-European Union organizations must establish a local footprint to avoid being squeezed out but should consider low-cost regions to improve attractiveness, Iyengar said.
As for predictions five years ago that Indian IT companies will expand recruitments in China, Iyengar said hiring in the neighboring country has grown only by one-sixth the expected size. He blamed this on Indian companies underestimated the challenges of attracting and retaining Chinese employees, said the report.
Big data - the analysis of large chunks of information or data sets too complex to be processed by traditional methods - is expected to be next growth driver for the IT industry, said Naveen Mishra, a principal research analyst at Gartner.
But while big data will require the employment of 4.4 million people globally by 2015, only one-third of those jobs will be filled because of a lack of skills, he said. Big data spending is expected to exceed $130 billion by 2015, according to Gartner. (GIN - AmericanBazaarOnline.com)