In the last few years, India has attracted enormous attention for its booming outsourcing industry. Multinationals and other foreign companies have outsourced numerous jobs to India, most notably IT positions and call center jobs. Recently, however, foreign companies in India have confronted shortages of experienced and talented job-seekers to fill their positions. This demand for quality laborers has created a rapid increase in salaries in India, forcing many companies to rethink their India strategies.
Part of the problem lies in the higher education system. Although top-tier schools in India are on par with US universities, these elite schools graduate less than 100,000 people out of the over 13 million Indian students that graduate college each year. Also, many of the second and third tier universities have "antiquated" educational curriculums. With very few elite graduates, there is a shortage of talented job-seekers in India. In response to this problem, many private investors and private companies have begun to invest in educational institutions and private training programs to cultivate talent. One retail company has developed retail management courses at two large colleges in India, and another engineering company has invested close to $4,000 dollars per new hire for on the job training.
Companies, however, are not only having problems finding employees, but are also struggling to retain these highly-skilled laborers because of rapid wage increases. Many talented employees frequently change jobs in search of better salaries and benefit packages. In order to combat this problem, companies have developed new methods to keep workers happy such as promising them quick promotion to management positions.
With rising salaries and labor shortages many outsourcing businesses such as call centers have moved to cheaper countries such as the Philippines where English is also widely spoken. These problematic developments in India may have serious implications for the future of India´s economy and outsourcing industry.
