Slashdot Mirror
Ask Indian Techies About 'Onshore Insourcing'
This Slashdot interview has a little twist to it. Instead of using email, I'm going to relay your questions 'live' to people I meet while I'm here in New Delhi, speaking at LinuxAsia2004. Offshore outsourcing has gotten a lot of attention on Slashdot (and NewsForge) lately, but I figure that from this end we ought to call it 'onshore insourcing' instead. Feel free to ask other questions about 'geek life' in India, too; I'll ask as many questions as I can of as many people as I can, and post their answers when I'm back in the U.S.
I might be able to answer that in real terms for outsourcing projects (instead of just relocating the jobs)
During the dotcom and shortly after, the going rate for Java developers was around $100-$120 per hour (Northern California). To undercut the competitors and local contractors, an Asian software company bid on (and received a contract) to supply Java programmers.
The billing was at $80 per hour. Out of that, the programmers on site received the following:
:)
a. $40-$50 per diem fees (yes, that's right.. per DAY)
b. free fuel
c. a rented car
d. rented housing, situated reasonably close to their office
Each of the outsourced contracts typically ran for 8-12 months. Obviously, the programmers were also flown in and back home by the parent company. Now, you figure the margins
Disclaimer: this is just one case.. so YMMV
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 benifits 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 atleast 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.
Since I'm an Indian techie, I'll attempt to answer that. But the disclaimer is that these are purely my personal views and not a general Indian opinion.
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?
It is quite clear that the US companies are using the tactics of outsourcing purely for their own financial benefit. It is extremely naive to think otherwise. And this is not just a US phenomenon. Every company around the world that outsources cheaper expertise and/or labour is doing just that... trying to get a competitive edge over its rivals by cutting costs. And I am sure that all the Indian developers (all but some of the greenhorns fresh out of college) know this fact when they're getting into it.
So why do the Indians still do it?
The Indian software firms use the US necessity as an opportunity to grow themselves internationally. An Indian company bagging a key US contract can proudly proclaim their achievement and use it as a differentiator amongst its local peers.
Some of the developers, who are geekily inclined, love the opportunity of doing some 'quality development' and so they hardly complain. Others are overjoyed at the prospect of travelling to the US and hence jump onto the bandwagon!
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?
I, for one, don't entertain illusions that the US companies would fall in love with our work and ignore cheaper alternatives if they present themselves. I don't think anyone else here does either!
With the US (and the global) economy having gone through a rough patch over the last year, the Indian companies have slashed their margins big time, to remain attractive for the Us companies to continue doing business with them. And I think the Indians have understood that in the immediate future they will need to stay one step ahead of their competitors by being the cheapest even though India has managed to brand itself as a key mover of the knowledge-based economy.
What does a decent 2 bedroom apartment cost per month?
Depends on how far it is from what americans call "downtown." See, unlike in the US, people in Indian cities prefer to live *near* downtown. So rents are much much higher if the flat is close to where the offices and shops are. Such a flat might cost around Rs 25000/- per month (around $500/-) and would be 1500 sq ft in size. 20 minutes away would be around Rs 10000/- per month. 30 minutes away would be around 5000/- per month.
How about food for 1 month?
I can eat out every night for less than Rs 300/- per person per night. If I cook at home, it'll probably cost me around 50/- max. (That's around $1 and change.) I don't have breakfast, and lunch is Rs 25 at the office - that's 50c to you.
Utilities, etc?
I assume that means water and power.
Let's see - power would be between 500/- to 1000/-
Water would usually be included in the flat rent or building charge. Say another 1500/- which would include water (unmetered) plus security and the use of the building gym and/or swimming pool.
You know, Slashdot does have quite a sizeable Indian community, though you might not be aware of it. So you might think about asking the questions here itself!
/.. Anyway, now that I'm done introducing myself let me see if I can answer some of the highest moderated questions.
I am an Indian and currently working for Tata Consultancy Services Ltd., India's largest software company that recently exceeded 1 billion dollars in revenue. Right now I am stationed in South America from where we cater to most of the Latin American countries. I'm pretty much the typical 'target' of most of the American outsourcing anger that gets vented here on
How do you feel about the American programmers that are angry they lost their jobs to outsourcing? Do you think they have a right to be angry?
The way most Indians see it, this is mostly American capitalism biting them back in the ass. We do the same thing you do, but we do it at cheaper rates. Sure, we understand that Americans wouldn't be too happy about losing their high-paying jobs, but that is something they will just have to deal with.
Cost of living etc. in India, with emphasis on real estate etc.
Most people who start out in the Indian IT industry do not earn that well. On an average, I would say it is pretty much the same as what one would get after graduating from one of the other engineering disciplines like EE, CE etc. However, with a few years of experience one can get quite a comfortable job. For example, a typical IT worker with 3-4 years of experience can land themselves a job that pays about Rs. 40,000 per month (~ $1000). This is a good income in a country like India where you can have servants in your house for about Rs. 2,000 per month. AFAIK, there has been no study which studies the impact of these new IT jobs on the real estate market, but obviously some effect must be there.
Is the picture there as rosy as painted by the media?
I hate to say this on Slashdot, but it is actually quite good. Students from reputable colleges and universities do not find it difficult to find jobs in the IT sector. However, I would not agree that the degree does not matter. Most companies (the good ones anyway) are quite choosy about the people they pick.
How much experience do most Indian programmers have?
I would say ~5 years on an average. Agreed, there are a LOT of new people coming into the industry, attracted by the 'gold rush', but there are quite a few old veterans here as well. For example, my company is over 35 years old, and it is not uncommon to find people who have been here for the past 7-8 years.
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 benifits 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?
No, the story you hear about 'sweatshops' are not true. Yes, we do have benefits. No, there no unions, yet. A typical week is 40 hours (8x5), but almost always is more than that, depending on the work load. Sometimes people do work for 15 hours straight, but on other days they also go home after putting in their normal 8 hours. We have vacations and medical benefits. TCS itself is not a public company, so there are no stock options here, but other public companies do give the option to their employees. Labour is inexpensive primarily because of two reasons - there are a LOT of people in India, and the cost of living is quite low.
How does it feel to have your skills and knowledge continuously disparaged by people with little or no experience of working with Indian programmers?
Personally, it bothers me
I work in India, and I am employed writing software. I make about 7000 rupees a week, and I work about ten hours a day on the average it changes every week. You are right that money is different here. For instance a succelent dinner for two is about fifty rupees.
-Srividya