Large banks and IT firms have been tapping into the technology talent pool of the country for a long time now and since last year, a few American and European product companies have also started to direct their technology development work towards India.
The shift to the Indian market for tech talent can be attributed to the battle that the American and European companies have to face in their home market against the large firms functioning in the market.
Quolum, the Software as a Service (SaaS) firm that entered the Indian market earlier this year, has already hired three Indians in its four-people tech team.
Joseph Devasia, the managing director of Antal India, an executive recruitment firm said, “Over the last seven to eight months, we have seen a lot of product companies move tech teams to India to leverage the cost arbitrage. These companies have proven business models and find it easy to attract talent by paying 1.3-1.5 times the prevailing salaries in India.”
Foreign markets do not hesitate from paying marginally high salaries to Indian talent as it is only one-fifth of what they would have to actually pay in their home markets.
Gaurav Chattur, the MD-Asia Pacific, Catenon Group, a recruitment firm that assists global companies in acquiring talent for operations in India, commented on the same saying that, “The US and European countries are inherently short on tech talent. The visa norms in these countries are also a challenge, which is why even early-stage firms are considering India.”
Cornell University conducted a study on the same and found that foreign-born students who are studying in the USA are more likely to opt for large tech firms rather than a startup, mainly citing visa issues.
Smaller companies generally do not have the resources that can help in the procurement of the H-1B visa, which is essential for a non-US citizen to work in the USA. This is the reason that small firms are not being able to find the right talent. Moreover, the large IT service firms have intensified their hiring process in the US which has left the talent supply pipeline completely choked for the smaller product companies.