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The days of work going offshore to Indian ITpros earning $15,000 a year? They're gone. Now salaries are at leastdouble that, according to a seemingly reliable source.
My source is "One of the other guys," a reader who responded to a blog I wrote earlier this week on my disgust with xenophobia in the offshore outsourcing discussionthat drew something like 150 comments to date, many calling for my headon a stick. But "One of the other guys" stood out to me, because he hada uniquely interesting perspective. He's an IT guy working in India.
"One of the other guys" tells us that he was working in the U.S. forquite some time (under a work visa I'm sure) and has since returned toIndia. He says: "I can also see lot of my colleagues/friends are allreturning, so now the talent pool in India is not necessarily the'cheap lot', but…experienced professionals returning back home with theskills they learned outside."
InformationWeek wrote:
"One of…" tells us that experienced programmers and technical architects in India now earn close to $3,000 a month.
He says:
Quote:
"Five years back this would have been more than the uppermiddle class income. But now with all the other industries, including[consumer goods] booming, this is the upper middle class income."
"One of…" adds:
Quote:
"Cost of living also has risen drastically."
Hedisagrees with a statement he read that the cost of living is one tenthof the U.S. "Just like California, New York, Chicago are expensivecities," Mumbai and Bangalore are expensive by Indian standards, hesays. "Your average monthly rent for a decent two-bedroom apartmentmight come to 600-700$ + per month now in Mumbai or Bangalore…Bangalore is where most of the IT jobs are coming by the way." (That'ssurprising, considering I remember back in the early '90s when youcould find a $700 two-bedroom in San Francisco, if you weren't pickyabout the neighborhood.)
Quote:
My report from India continues: "This has to do partly with all theindustries booming in India. Five years back IT salaries where five orten times the industry average. But now all the other industry segmentsare catching up. And these industries have grown because of domesticdemand in India. Outsourcing revenues form only a tiny percent ofIndia's Trillion dollar economy. The stock market ( SENSEX BSE ) hasrisen by over 7 times within the past 2 years."
He goes on, "Of course even with all these statistics there is asignificant percentage of the population living under the poverty line.But the middle class is also growing and with everything else the costof living."
I think the insight "One of…" shares with us from India isinteresting for a couple of reasons. One, it shows that any U.S.company hoping to find dirt-cheap software coding in India will likelyfail. Since there's no sign of a slowdown in India's economy, thesesalaries will only rise.
It also seems to underscore what numerous CIOs have told me, whichis that they now offshore outsource to India not JUST because ofcheaper costs (which they still get, but acknowledge are rising), butbecause India provides a very large pool of talent from which todraw--talent they can't always find in the U.S. If companies are nowshelling out $36,000 for an IT pro, add to that the costs of managingan offshore relationship, and it may not be too far off the averageU.S. IT salary. So why would they continue to outsource if it weren'tfor the talent they can't find here?
But that's where we hit the fork in the road, folks. Because manyreaders of InformationWeek, through their blog posts, are telling usthat this isn't true. Even though the IT unemployment rate is about 2%,according to the U.S. Labor Dept., there's still clearly a lot ofpeople out there who are fearful of losing their jobs or have losttheir jobs to cheaper labor in India.
This is a very real concern throughout the IT workforce and it can'tbe ignored. It's in CIOs self-interest not to ignore this, either,since they have also told me that it's very important that theycontinue to recruit and develop good talent here in the U.S. If peopleleave IT in droves or discourage their children from entering it, theirsearch for homegrown talent will intensify.
There's a huge discrepancy here between management claims of not enoughtalent and the claims of U.S. talent saying they're not getting joboffers because too much work is going offshore. What to think of that?
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