Higher wages and staffing competition has hit India's outsourcing centers

India has become the location of choice for offshore outsourcing, but that status may be fading as companies confront old realities and new problems that are cutting into hoped-for savings.

Higher wages and staffing competition has hit India's outsourcing centers. Those problems, added to the difficulties of moving vital business functions halfway around the globe, are making other locations around the world increasingly attractive.

The financial calculation for offshoring in India has changed, says Ukesh Chand, who has coordinated corporate outsourcing operations for many years.

"If you look back 10 years ago, the price was right. It looked very attractive," Chand said. "But as you go now as a new player, the prices are very competitive - they're higher now."

To be sure, India still has much to offer. The country's work force possesses technical skills, English language skills and other advantages that few countries can rival. Substantial investment in infrastructure and state-of-the-art facilities in cities such as Hyderabad have attracted companies, as well. And the country's IT boom has brought it closer than ever to the United States.

Bangalore-based Infosys, one of India's leading technology services firms, boasts a client list that shows the scope of outsourcing in the country: Accenture Ltd., Andrews Air Force Base, Avis Rent a Car System LLC, Ernst & Young LLP, Hewlett Packard Co., IBM Corp., Lockheed Martin Corp., the New York Board of Education, the U.S. Army, the U.S. Navy and the Women's Sports Foundation.

But companies considering outsourcing in India need to look hard at the special challenges and plan accordingly, experts say. Obstacles are created by distance, culture, and language, not to mention the far-reaching social and economic changes taking place in Bangalore and other parts of India, where the outsourcing trend has meant much more than just new jobs.

To begin at the bottom line, the savings from offshoring to India are generally far less than they would seem to be at first blush. Wages in India may be lower, but they are rising and many other factors are involved.

Cynthia Kroll, a senior economist at the Fisher Center for Real Estate and Urban Economics at UC-Berkeley's Haas School of Business, has studied the offshore outsourcing trend.
She says companies may see that Indian programmers, for instance, make only one-fifth of the wages of their Bay Area counterparts, but the ultimate savings may be only 30 percent, not 80 percent.

Companies sometimes base their initial cost assessments on wages at the offshore location at the time. But, Kroll says, those firms find that savings shrink as wages rise. And reports show that rising wages have become the norm in India's outsourcing centers.

Next, companies usually need more managers and programmers for IT operations for the same jobs in India because of the distance and training required, adding substantially to the cost.

Companies also need to think about the learning curve, Kroll says. There is more to the process than just giving the assignment to a talented individual. There are reasons why tech activities tend to congregate in one place, as they have in the Bay Area.

This has been echoed by IT workers. Development advances often come from informal conversations in the United States - quite differently from other countries. Are the best ideas carefully formulated through an official process and chain of command, or do they spring up in spontaneous discussions around the water cooler?

Retention is directly proportional to the Organization Culture

Retention is directly proportional to the Organization Culture, so Organisations need to make sure that it has a conducive culture for employees to operate. Here are some interesting Retention Tools which I came across-

1. Offer fair and competitive salaries. Fair compensation alone does not guarantee employee loyalty, but offering below-market wages makes it much more likely that employees will look for work elsewhere. In fact, research shows that if incomes lag behind comparable jobs at a company across town by more than 10 percent, workers are likely to bolt. To retain workers, conduct regular reviews of the salaries you offer for all job titles — entry-level, experienced staff and supervisory-level. Compare your department's salaries with statistically reliable averages. If there are significant discrepancies, you probably should consider making adjustments to ensure that you are in line with the marketplace.

2. Remember that benefits are important too. Although benefits are not a key reason why employees stick with a company, the benefits you offer can't be markedly worse than those offered by your competitors

3. Train your front-line supervisors, managers and administrators. It can't be said often enough: People stay or leave because of their bosses, not their companies. A good employee/manager relationship is critical to employee satisfaction and retention. Make sure your managers aren't driving technologists away. Give them the training they need to develop good supervisory and people-management skills.

4. Clearly define roles and responsibilities. Develop a formal job description for each title or position in your department. Make sure your employees know what is expected of them every day, what types of decisions they are allowed to make on their own, and to whom they are supposed to report.

5. Provide adequate advancement opportunities. To foster employee loyalty, implement a career ladder and make sure employees know what they must do to earn a promotion. Conduct regular performance reviews to identify employees' strengths and weaknesses, and help them improve in areas that will lead to job advancement. A clear professional development plan gives employees an incentive to stick around.

6. Offer retention bonuses instead of sign-on bonuses. Worker longevity typically is rewarded with an annual raise and additional vacation time after three, five or 10 years. But why not offer other seniority-based rewards such as a paid membership in the employee's professional association after one year, a paid membership to a local gym after two years, and full reimbursement for the cost of the employee's uniforms after three years? Retention packages also could be designed to raise the salaries of technologists who become credentialed in additional specialty areas, obtain additional education or take on more responsibility. Sign-on bonuses encourage technologists to skip from job to job, while retention packages offer incentives for staying.

7. Make someone accountable for retention. Measure your turnover rate and hold someone (maybe you!) responsible for reducing it. In too many workplaces, no one is held accountable when employees leave, so nothing is done to encourage retention.

8. Conduct employee satisfaction surveys. You won't know what's wrong ... or what's right … unless you ask. To check the pulse of your workplace, conduct anonymous employee satisfaction surveys on a regular basis. One idea: Ask employees what they want more of and what they want less of.

9. Foster an environment of teamwork. It takes effort to build an effective team, but the result is greater productivity, better use of resources, improved customer service and increased morale. Here are a few ideas to foster a team environment in your department: • Make sure everyone understands the department's purpose, mission or goal. • Encourage discussion, participation and the sharing of ideas. • Rotate leadership responsibilities depending on your employees' abilities and the needs of the team. • Involve employees in decisions; ask them to help make decisions through consensus and collaboration. • Encourage team members to show appreciation to their colleagues for superior performance or achievement.

10. Reduce the paperwork burden. If your technologists spend nearly as much time filling out paperwork, it's time for a change. Paperwork pressures can add to the stress and burnout that employees feel. Eliminate unnecessary paperwork; convert more paperwork to an electronic format; and hire non-tech administrative staff to take over as much of the paperwork burden as is allowed under legal or regulatory restrictions.

11. Make room for fun. Celebrate successes and recognize when milestones are reached. Potluck lunches, birthday parties, employee picnics and creative contests will help remind people why your company is a great place to work.

12. Write a mission statement for your department. Everyone wants to feel that they are working toward a meaningful, worthwhile goal. Work with your staff to develop a departmental mission statement, and then publicly post it for everyone to see. Make sure employees understand how their contribution is important.

13. Provide a variety of assignments. Identify your employees' talents and then encourage them to stretch their abilities into new areas. Do you have a great "teacher" on staff? Encourage him/ her to lead an in-service or present a poster session on an interesting case. Have someone who likes planning and coordinating events? Ask him to organize a departmental open house. Know a good critical-thinker? Ask him/ her to work with a vendor to customize applications training on a new piece of equipment. A variety of challenging assignments helps keep the workplace stimulating.

14. Communicate openly. Employees are more loyal to a company when they believe managers keep them informed about key issues. Is a corporate merger in the works? Is a major expansion on the horizon? Your employees would rather hear it from you than from the evening newscast. It is nearly impossible for a manager to "over-communicate."

15. Encourage learning. Create opportunities for your technologists to grow and learn. Reimburse them for CE courses, seminars and professional meetings; discuss recent journal articles with them; ask them to research a new scheduling method for the department. Encourage every employee to learn at least one new thing every week, and you'll create a work force that is excited, motivated and committed.

16. Be flexible. Today's employees have many commitments outside their job, often including responsibility for children, aging parents, chronic health conditions and other issues. They will be loyal to workplaces that make their lives more convenient by offering on-site childcare centers, on-site hair styling and dry cleaning, flexible work hours, part-time positions, job-sharing or similar practices. For example, employees of school-age children might appreciate the option to work nine months a year and have the summers off to be with their children.

17. Develop an effective orientation program. Implement a formal orientation program that's at least three weeks long and includes a thorough overview of every area of your department and an introduction to other departments. Assign a senior staff member to act as a mentor to the new employee throughout the orientation period. Develop a checklist of topics that need to be covered and check in with the new employee at the end of the orientation period to ensure that all topics were adequately addressed.

18. Give people the best equipment and supplies possible. No one wants to work with equipment that's old or constantly breaking down. Ensure that your equipment is properly maintained, and regularly upgrade machinery, computers and software. In addition, provide employees with the highest quality supplies you can afford. Cheap, leaky pens may seem like a small thing, but they can add to employees' overall stress level.

19. Show your employees that you value them. Recognize outstanding achievements promptly and publicly, but also take time to comment on the many small contributions your staff makes every day to the organization's mission. Don't forget — these are the people who make you look good!

Hand Writing reveals your personality

Your Hand writing tells much about you. Check how.

•If letters slant to the left: Indicates introspection and a lot of emotional control.

•If letter slant to the right: Reveals a person who's outgoing, friendly, impulsive, and emotionally open.

•If letters are straight up and down: The sign of someone who's ruled by the head, not the heart.

•Letters that slant in more than one direction: Indicates versatility and adaptability.

•An erratic slant: Usually means a lack of flexibility.

•Heavy pressure writing (like you can feel the rib made on the back of the paper): The writer is agitated.

•Moderate pressure (the writing is dark, but you can't feel the rib on the other side of the paper): Shows ability to deal with stress.

•Light pressure: Indicates someone who seems to take life in stride.

•Tiny letters: Indicate the writer is has somewhat low self esteem but is intelligent.

•Small letters: The hallmark of quiet, introspective types - they're generally detail-oriented and have good concentration.

•Large letters: Sign of a confident, easygoing individual.

•Huge letters: Indicate someone who's theatrical, usually loud, and needs to be the center of attention at all times.

•Wide letters (their width and height are about the same): The mark of someone who's open and friendly.

•Narrow letters: Show someone who's somewhat shy and inhibited but very self-disciplined.

•Letters that don't touch: Indicate an impulsive, artistic, sometimes impractical free thinker.

•Some letters connecting: Means the writer's personality blends logic and intuition.

•All letters making contact: The sign of someone who's highly cautious.

•A curved first mark: Shows a person who's traditional and plays by the rules.

•A straight beginning stroke: Reveals someone who's rigid and doesn't like being told what to do.

•A final stroke straight across: The writer is cautious.

•An end mark that curves up: Reveals generosity.

•Perfect penmanship: The hallmark of a communicative person.

•An indecipherable scrawl: Indicates a person who's secretive, closed-up and likes to keep his thoughts to himself