Indian Techies Answer About 'Onshore Insourcing'

Indian Techies Answer About 'Onshore Insourcing' 839

Posted by Roblimo on Tuesday February 17, 2004 @02:15PM from the it's's-the-same-the-whole-world-over dept.

This is an unusual Slashdot Interview, since instead of using email I asked all the questions in person last week either at LinuxAsia2004 or in casual meetings with local LUG members and other techies I met during the conference. Some of your questions were answered quite well by other Slashdot readers in the original post. (Slashdot has many readers both in and from India.) I also inserted a number of personal observations, which I usually don't do in these interviews, because it seemed to be the best way to answer some of the questions. And some questions were nearly unanswerable, as you'll see when you read the rest of this article.

Before outsourcing, "hardship" visas, by RobertB-DC

Long before outsourcing to India became an issue, large IT companies like American Airlines [aa.com] were virtual H1-B "hardship" visa factories, importing large numbers of technical experts from India and other countries during the dot-com boom.

But when the boom went bust, and the layoffs came, H1-B visa holders were left out in the cold, unable to even look for a new job due to the terms of their visas.

Do the IT professionals you've met feel that US companies and the US government used bait-and-switch tactics to take advantage of cheaper non-US workers? Or did those applying for H1-B visas know what they were in for?

And a follow-up question: does anyone think that US companies will hesitate to leave their outsourcing partners high and dry as soon as they (again) find a cheaper alternative?

A:

Network administrator Manpeet Nemra says, "No, it was their choice to go. They always knew what the situation was. If you leave out the first few, the rest had contacts there and knew.

Others echoed his reply, and a few thought the questioner wasn't "thinking very clearly." One Perl programmer asked, "Does he think we don't have email lists and Web sites? We are techies. We stay in touch all over the world. We know what's going on everywhere, same as you."

On re-outsourcing: Ashvini Vishvakasarma, a consultant with Techspan, feels that American and European companies currently outsourcing work to India won't hesitate for a second to move their work elsewhere if they find a cheaper alternative. "They will move in a flash," he says. "They're leaving for the Philippines already. It's very disturbing for Indian programmers."

Average experience? - by El

How much experience do most Indian programmers have? It seems to me that in ramping up from a few hundred to thousands of programmers over the past few years, most of these people must be fresh out of school... how much training do people need before they start producing reliable results?

A:

It's common here for new grads (slang term: "freshers") to spend up to six months in a low-paid or even unpaid internship before they get a "'real" job. This is true not only of programmers and other IT people, but in almost all white collar positions. One of the desk clerks at the hotel I'm in is a new-grad management trainee who earns what she calls "a stipend that buys my clothes," and won't start earning her full starting salary -- about $330 per month -- for another four months.

Another factor (see other answers further down) is that some Indian programmers, like some American programmers, may be recent college grads, but have been messing with computers since their early teens or even before. The Delhi LUG's youngest current member is 13, and is dipping his toes into programming waters. Some of the college student members take on programming or Web projects for friends and family. In other words, many Indian new-grad IT people -- just like many new-grad IT people elsewhere -- may already have quite a bit of real-world experience when they get their "first" job.

Code Monkeys v. Architect? - by yintercept

Related to the experience question: Many US business pundits claim that the US is only outsourcing the low end code monkey and support jobs, and is keeping the higher end, more prestigious "project management" and architect jobs in the US?

First, is this the case? or is India also excelling in architectural and design work?

If it is the case, is there a resentment for the imperialistic attitude in only giving India the low end projects?

Finally, in a land where there are real monkeys am I making a big cultural blunder by calling people "code monkeys"?

A:

I got hit with a chorus on this one. The consensus was that in a poor country like India a job is a job, and one takes what one can get. If U.S. and European firms want to have Indians do only "low end" projects, fine. Meanwhile, home-grown companies are doing their own architecture and research, working desperately to build an India-based software industry that can survive after the "low end" outsourced projects move to China or wherever.

Response to the "code monkeys" comment, loosely translated into American English from Hindi-accented New Delhi English: "Ha, ha, ha, ha. It is the same everywhere. Some of us are good at this work, but many aren't. There are code monkeys everywhere. Real programmers, too, and real programmers here call code monkeys 'code monkeys' here same as anywhere else. Pass me another beer, will you?"

Quality of life - by Scott Lockwood

American workers have certain legal protections that drive up the cost of our wages. Do Indians have similar protections in the workplace? Are you allowed to organize into unions? How long is your work week? What are your working conditions like? What kind of benefits do you have? Vacation? Medical? Dental? Profit sharing? Stock options? I find myself wondering, if the playing field were truly level, would your labor still be so inexpensive?

A:

At least five people said a comment attached to this question in the original interview post summed up the situation nicely. Here's that post (from "Anonymous Coward"), repeated:

I work for a large Multinational Tech Co.

Do Indians have similar protections in the workplace? -- Yes. The rules are the same.

Are you allowed to organize into unions? -- Unions are definitely allowed by law. But as in the U.S there are no Unions of Software Professional. BTW, India is probably the only place in the world where there is a democratically elected communist state govt. In fact, the labor laws are stricter here. Its nearly impossible to fire Blue Collared Workers or Declare Bankruptcy.

How long is your work week? -- I put in the usual 40 hrs a week over 5 days.

What are your working conditions like? -- The food in the cafeteria is better here than what I had when I was in U.S :-)

What kind of benefits do you have? Vacation? Medical? Dental? Profit sharing? Stock options? -- Folks in India probably get more vacation than in the U.S. As per Indian Law there has to be at least 14 days of earned leave and 7 days of sick leave. This is excluding the 3 national holidays (Republic Day, Independence Day, Gandhi Jayanti); 3 Hindu Holidays, 2 Muslim Holidays and 2 Christian Holidays, Plus 1 State holiday; Unless they fall on the weekend. As far as Medical goes, Govt of India Rules specify that a group Medical Insurance Policy be taken out by the Co. Usually this works out to a coverage of about $10000 for about $40 a month. Profit Sharing, Stock Options and Employee Stock Purchase Plans all exist. In fact one of the biggest stories used to be the Infosys Stock Plan. Also, the Govt Specifies that 12% of your Salary be paid by the Company towards Pension each month. This earns about 9.5% interest.

I find myself wondering, if the playing field were truly level, would your labor still be so inexpensive? -- Thats because cost of living is far cheaper here. Food - about $50 a month, Rent about $175 a month, Entertainment, Eating out etc.. about $100 a month. So in all about $350 a month is more than enough. Whatever remaining usually goes into buying a car or a house.

Population vs. population with jobs? - by bc90021

With one billion people in India, what is being done to increase the number of employable people? Granted, while we in the US may not like our jobs leaving, it must be helpful to Indians. What is being done to increase the employability of the average Indian?

A:

This is a touchy subject. Less than 15% of the Indian population is what Americans would call "middle class." Many Indian workers live on between $35 and $100 per month, and one of the first sights a foreign visitor notices when walking out of the terminal building at the Delhi airport at midnight is people sleeping on the ground, right on the airport grounds. Begging is common almost everywhere except in communities and office complexes that have gates and guards to maintain control on who can and can't enter. I'll post several stories, with photos, on NewsForge later this week that will go into more depth about economic conditions in India and how the software industry does -- and doesn't affect them, but for now let's confine ourselves to a couple of quotes from Sankarshan Mukhopadhyay, who grew up in comparative poverty and is now a programmer/consultant who makes his living doing outsourced work for U.S. companies:

I grew up in a very poor village. My father made $10 per month as a schoolteacher. One bicycle was our only family transport. I went to college as a scholarship student. I did well in my exams, so the government paid for my education. Now I own two houses, and the workers I hired to build both of them had no other work, so that helped bring money into my village. My father and mother live in a house I built, too. I rent out one of the houses I own now and live in the other one. The money I earn spreads through the economy. Fathers work at better jobs because of my spending and can keep their children in school instead of having them go out to work early.

Mukhopadhyay believes that in the long run, to help technology benefit more of the population and raise living standards for all, India needs more of a "bootstrap economy. We need acceptance of the fact that innovation can come out of India."

He is not alone in this belief. Although the LinuxAsia2004 conference was heavily weighted toward speakers selling systems (i.e. Sun, IBM, and their giant brethren -- the "usual suspects") there were many small, quiet sessions that revolved around using computers and the Internet to distribute information to people in neighborhoods and villages where books are now rare and expensive.

The government talks constantly about uplifting all of India, not just the current rich and "middle class," but when you look at that one billion population figure and see the amount of money available, things still look bleak -- although India's economy is now increasing at a much faster rate than the population, so things are less bleak now than they were a generation ago.

But there is a long way to go. India's problems aren't going to be solved in a few years or even a few decades. This is an old country; Delhi has been continuously inhabited since about 1000 B.C., and in many ways life for some residents hasn't changed a great deal since then. India has only had an elected government since its independence from Great Britain in 1947, and politics since then have more tumultuous than not. While I was visiting, for the first time ever plans were being made for Cricket matches between the Indian and Pakistani national teams, with constant back-and-forth waffling by government people in both countries about whether the terrorism risk was acceptable. Last I heard, the match was going to happen.

So look for improvements in India overall, not just for the top 10% or 20% of the population. Just don't hold your breath waiting for all one billion Indians to become literate, well-dressed, and own motorcycles or cars (or even to have electricity and good plumbing), because even if every software job in the U.S. ends up there, and none later evaporate to even poorer countries, India's "modernization" could easily take a century or more.

Education Costs - by dachshund

How much does an Indian college education cost the typical student? Is it government subsidized, or are students expected to pick up the entire cost? And how does that cost compare to the average yearly salary of a college-educated technology worker (ie, how long does it take you to pay of college debt?)

A:

There's a big "it depends" attached to this answer. As noted above, Sankarshan Mukhopadhyay got a government-supported scholarship because of his high entrance exam test scores. Students with lower test scores but prosperous parents can also get into college. And now, according to one educator I met at the Centre for Development of Advanced Computing (CDAC), banks are starting to loan money to cover student fees at what she called "favourable interest rates."

According to CDAC students Vikas Gupta and Loveleen Choudray, it takes three to four years of work for most loan-supported students to pay off college debts. They told me 20% of university seats are reserved for free (scholarship) students, while the cost of a "paid seat" can range from 22,000 rupees (about $486 US) up to 72,000 rupees (about $1600 US), depending on the school.

This is eminently affordable for middle class Indian families (both Gupta and Choudray are going through college on their parents' tab) -- but don't forget that "middle class" is not a high percentage of the population. (See the next question and answer.)

Cost of living? - by demigod

What does a decent 2 bedroom apartment cost per month?

How about food for 1 month?

Utilities, etc?

A:

I was asking this question in New Delhi, India's capital city, and living costs in India vary as much as they do anywhere else depending on where you live. I met programmers who lived in apartments and houses that cost anywhere between $200 and $500 per month, and a few who lived in compounds their families had owned for generations. The consensus was that $11,000 or $12,000 (US) per year was plenty to support a middle class lifestyle. But "middle class" there is not the same as in the U.S. Some differences:

Indians drive tiny cars by U.S. (or even European) standards
The motor scooter or motorbike is common transport for young people -- and a 100cc bike is about as big as most get, with 150cc to 200cc considered powerful speed machines.
If you don't own a car, you can hire one -- including chauffeur -- for about $10 per day.
Forget public transportation. Buses are filthy and overcrowded. You're probably better off taking one of the seemingly millions of green, three-wheeled auto-rickshaws that are on every street in the city. (They are limited by law to three passengers, but I saw seven people get out of one...)
Servants cost about $35 month to hire in New Delhi. Every "middle class" Indian household seems to have at least one live-in servant -- but few have dishwashers or other "household convenience" appliances.
Food and clothing are amazingly cheap by Western standards. I mean seriously cheap, like less than 1/10 as much. On the other hand, programmers in India are professional workers who are expected to wear suits and ties for most business events (although most wear the same basic "jeans and t shirt" fashions as their U.S. counterparts when not required to dress up).

It's hard to put a one-to-one comparison on cost of living between countries with different cultures and economic imperatives. Medical care (and health insurance) are much lower in India than in the U.S., but then you can bring up the example of Canada and its national health insurance, for which Canadians pay higher taxes than U.S. residents.

Bottom line: You can have a decent life in New Delhi for around $12,000 US per year -- but to earn that much you'll probably need to have source of income from another country -- like programming outsourced from the U.S. or Europe -- because most white-collar jobs there pay $6000 US or less, and burger-flipping there is likely to net you more like $2000, which may not be enough to afford an apartment with electricity and running water. (And yes, plenty of people in New Delhi live without running water or electricity.)

Distorting the Economy - by BigBadBri

Not specifically about IT outsourcing, but more about call centre outsourcing - does the drain of educated people to call centres have any implications for the rest of the economy?

Call centre staff can earn more than teachers, police, nurses, etc - are those professions suffering as a result of the call centres picking out the English speakers?

Is this storing up problems for India's public sector in the future?

A:

I had a long conversation with a guy who works as a hiring manager for Prudential's customer service operation in New Delhi.

Let's note, from the start, that Prudential does not "outsource" to India. They own their own call center (or centre, depending on your spelling heritage) there. When you speak to someone in their New Delhi office, she -- and it is usually "she" -- is just as much a Prudential employee as someone working in one of their U.S. offices.

This call center woman is probably earning around $300 month (US), and without that job she'd be working in a shop for $100 per month. She works nights (so she can deal with calls from the U.S. during the U.S. business day), and one of her benefits is rides to and from work, so there is a whole transportation business sector that has developed to do nothing but take call center employees to and from work, not to mention cafeterias to feed her at work, Starbucks and other foreign chains (including McDonald s) where she spends her paychecks, cell phone companies that take her money because no techno-hip young Indian woman can be caught dead without a cell phone, at least from the examples I saw all around me.

Call center work is not necessarily permanent. It is a burnout job in India just as phone "customer service" work is in the U.S. It is also not that great on the pay scale. The breakfast waiter in the "American Diner" in my hotel said he made more waiting tables than he'd make in a call center; that he had friends who did call center work to help them get through college or whatever, but that no one expects to do it for life -- and besides, all those jobs will go to the Philippines sooner or later, anyway, so why bother?

So our Prudential guy is a good company man (who is not being quoted by name because he was not authorized to speak for the company, and the Pru gets tight about such things all over the world) and earns a nice salary, right up there with a programmer if not slightly higher. He's single, so he lives well, and friends say he has access to many potential girlfriends since he's in charge of hiring and training a workforce composed primarily of young women, which he acknowledges is a major fringe benefit.

Now the other side: There is no shortage of people in New Delhi to fill all the call center jobs -- and all the police, nursing, and teaching positions. and if all the people in New Delhi were suddenly employed, people from other parts of the country would flock there like mad, and if they don't know English they are willing to learn (including an American accent) if it will get them a decent job, and there are plenty of schools that will teach them either for an upfront fee or by taking some of their call center earnings after they get a job.

There is no shortage of people to do any kind of decent-paying work in India, period. The Army turns down at least 19 out of 20 applicants who want to be enlisted soldiers, and turns down 49 out of every 50 officer candidates, who must have college degrees even to apply in most cases.

This goes back to that whole "one billion people" thing. If a million of them work in "offshore" positions, that's only one out of thousand. Make it 10 million, and it's still only one percent of the population, and as the prosperity created by the 10 million working for offshore companies wends its way through the economy, more children will be able to go to school longer, which will make the workforce progressively more educated, which will increase the supply of potential employees for "first world" companies.

But don't forget: China, The Philippines, Vietnam, and other countries lurk in the wings, not to mention African countries that are still at the very beginning of the industrialization curve and have people more desperate by far than India has had for several decades now.

What about the long-term? - by The Night Watchman

This point has already been mentioned a bit by previous articles, but I'd like to hear an insider's take on it. The Indian tech economy is booming now, but like in the US, it's an unstable boom. Sooner or later, the US will look to other countries for their tech work, leaving India high and dry. What measures are being taken in India to maintain a strong internal tech economy, in the event that the US is no longer a serious customer?

A:

I got many answers to this question, and they all boiled down to, "We must build a domestic IT market."

But then, how can you do that in a country where a clerk costs less than a computer, and you have -- as one person put it -- "government officials out in the villages who are afraid to use a computer because they think the keyboards might give them an electric shock"?

Most people I talked to believe government is the only hope; that egovernment and other government projects are the only way to develop a sustainable local IT sector.

Next question (asked by Indians I spoke to): "Where is the government going to get the money?"

I was asked to pose this one to Slashdot readers. Consider it posed. Plenty of Indians would like to know the answer.

New Indian Startup Companies - by blueZhiftb

I'd like to know how long it will be before Indian tech professionals start forming startup companies to compete directly with their American corporate masters using what they have learned from them.

A:

It's already happening. Like mad. Half the people I met through the Delhi LUG are either self-employed or thinking about starting their own businesses. This could be a whole separate article, possibly even a whole series of articles.

Geek culture in India? - by Experiment 626

In the U.S., there is something of a geek subculture which Slashdot in particular caters to. Obviously, not all programmers are true geeks at heart, but among the people in America who are really fascinated by computers, you have a greatly disproportionate number who are into science fiction, RPGs/LARPs, Lord of the Rings, Legos, Anime, etc.

Does this apply in India as well? Would, say, a Unix systems programmer there typically have such things as interests? If not, are there analogous hobbies that distinguish the Indian geek from everyone else?

A:

After a few evenings hanging out with Delhi LUG guys (and yes, it's almost entirely guys), I realized that you could hold a joint meeting of the Delhi LUG and the Suncoast LUG here in Florida, and the only major differences would be the brands of beer ordered for the first round. The biggest argument would be over whose beer is better, followed by the ever-popular vi vs. emacs and KDE vs. Gnome controversies. Raj, from the Delhi LUG, and Logan, from the Suncoast LUG, would probably become huge buddies in about two seconds. I swear, if I closed my eyes while listening to Raj's bad jokes, sometimes I thought he was Logan -- and I mean this as a compliment to both of them.

All the Delhi LUG crowd reads Slashdot. For the most part, they read the same science fiction books and watch the same movies as their U.S. counterparts. The ones who play guitar know pretty much the same songs -- and generally (*ahem*) play with the same great skill -- as Rob Malda.

And the unmarried ones had the same complaints about never meeting appropriate girls, too.

Geek culture is worldwide. It's not exactly the same everywhere, but (so far) I've observed it first-hand in Mexico, Trinidad, Jordan, Saudi Arabia, and now India, and I assure you, there are many more points of similarity than differences between its various "branches," at least in my (limited) experience.

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