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In a Symbolic Shift, IBM's India Workforce Likely Exceeds That In US
dcblogs writes "IBM has 112,000 employees in India, up from 6,000 in 2002, with an average wage of about $17,000, according to an internal company document. That wage level may seem shockingly low to U.S. IT workers, but it is in alignment with IT wages in India.The Everest Group said the annual wages generally in India for a software engineer range from $8,000 to $10,000; for a senior software engineer, $12,000 to $15,000, and between $18,000 and $20,000 for a team lead. A project manager may make as much as $31,000. IBM employs about 430,000 globally. According to the Alliance at IBM, the U.S. staff is at about 92,000. It was at 121,000 at the end of 2007, and more in previous years. It has been widely expected over the past year or two that IBM's India workforce was on track to exceed its U.S. workforce, if it hadn't exceeded it already."
What happens when corporations can no longer exploit global wage differences?
Time for a union
I would say having most of your workforce in India, especially when we are talking about decent jobs not factory slave, is far more than a symbolic change.
If this keeps going the only jobs in the USA will be retail, CEO and no job.
India Business Machines!
Cheaper labor doesn't get you the same amount or quality of work. Replacing one coder with three coders 12 timezones away doesn't get the job done 3 times faster either.
Yet those laws made everyone's life better and increased the buying power.
Who are you going to sell your goods if no one has enough money to buy fancy stuff?
Love many, trust a few, do harm to none.
If high wages are such a problem, how come Costco can do it?
Wallstreet doesn't like it, they want Costco to lower the wages to the minimum to maximize short-term profits because just growing and making a decent profit ain't enough for shareholders... except Costco shares have gone up despite warnings from Wallstreet.
Wallstreet loves to squeeze everything to generate the max profit for shareholders this quarter... next quarter? They will will find another company to squeeze.
IBM can well outsource all the work but what happens to the knowledge? What stops an Indian company hiring IBM workers and creating Indian Business Machines? That is after all what Japan did with car production? First you make the parts, then you put the parts together and then you make your own parts and put them together and how is Detroit doing again?
Americans love blaming unions but North-West european countries (UK does not count) have strong unions and no problems with them. The Dutch Polder model was widely praised until right-wing POLITICIANS destroyed it, much to the chagrin of the supposed right wing business owners who just want to make a deal they can count them even if it costs a bit because uncertainty is WORSE for business then knowing a deal is going to cost you a fraction of a percent more in salaries.
The US needs to get over its love for Wallstreet, it is a leech and NOT a job creator.
You know the really funny thing? In Season 22 of the Simpsons we learn that he makes 70k a year... yet he is often shown in the series as a "poor" man who can't afford health care... 70k that is what its writers consider a low wage on which you can barely survive and are always struggling.
It shows you just how big the divide is. Wallmart workers make 24k a year if they are lucky. Costco make 50k. Both companies turn a profit. Which one do you shop at?
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
You must be pretty poor if you think $80K/year is good money in most/any American city.
Probably not in the Bay area, NYC, Boston...
In smaller cities with lower costs for housing, shorter commutes, lower taxes, it's probably fine.
Still depends on the state you're in. In New York, $80k is indeed a pittance, but in, say, Georgia, or Kansas, both of which have large cities, that would probably be a really nice wage. It's definitely more than I make; I'm a network/systems/SAN administrator in a very densely populated mid-atlantic/northeastern state, we have over 50 servers and around 4,000 users or more, point being, it's not a ma and pa shop I work for. Then again, most of my peers do make more, they bargained better than I did when they got hired; promotions are virtually nonexistent here.
Look back up at my post, now look back down, you're on the Internet. Now look back up. I'm a signature.
As opposed to the CEO who pulls in $1.5 million after her pay doubled along with her $3.5 million cash incentive target? Maybe she should be taking a paycut first?
The I always stood for "international".
When I worked for IBM UK, I collaborated with colleagues in the USA, Canada, Japan, India, mainland Europe...
Are you stupid or a liar?
Companies with less than 50 employees are totally exempt.
I'd love to see an objective measurement of IBM's quality of service from 2002 to now, mapped against the shift to a majorly offshore work model. I work for a subsidy of a very large consulting competitor of IBM's, and are witnessing the same phenomenon - more and more offshore workers tacked on to project teams that just drag everything down. The more offshore we're shackled with (and I really mean that - we're given no choice by service line leadership) the worse we are able to deliver on our projects. The biggest issue for me is that once we've been able to identify the offshore rockstars - the fabled guys you can actually work well with, trust, and receive good quality work product from, they either get instapromoted to management or realize they can get more than just the 17k/year salary or whatever it is they're getting and GTFO. Either way you don't get to work with them for long. Then you get whoever's free in the pool when you're building a project team - no calling "dibs" on the right guys for the job. Quite often you just get a warm body who isn't familiar with the tech you're working with, the processes of project delivery, or will refuse to perform any work unless you have mapped it out to the click.
90% of Americans have a personal income of less than $80K/year. So no, you have to be pretty rich to think $80K/year isn't good money.
But I think there will be many more winners than losers.
Maybe.
But here's the thing, the economists say that the pie gets bigger and as a result, everyone's living standards increase.
Yes?
But, in the US, our living standards have been decreasing for over a decade.
What the economists seem to miss is that at least in the near term, the World's economy can't grow fast enough to compensate for all the billions of people entering the World's economy. In other words, wages have nowhere to go but down. Add in technology - like communications being dirt cheap - and we're headed for not a very good place in the US - for the average person. The 1% elite (sorry about the '1%' but it's a quick approximation of who I'm talking about) who have money all over the World will do very well and hence; the rich will get even richer.
Am I advocating protectionism? NFW!
Do I have a solution? Nope - I'm not smart enough. I'm just smart enough to see that the economic groupthink is wrong - at least for a few decades. Maybe in a 100 years, we'll all be living at standards that will make Bill gates look like a pauper, but until then, we're headed for some troubling times.
That's barely above Wal Mart or Mcdonalds.
Except that a rupee buys five times as much in India as the exchange rate suggests. So it is more like making $85k. Manufactured products tend to cost the same in either country, but labor-intensive goods can be ten times cheaper or even more. It is common for an Indian to ride a bicycle, because they cannot afford a car, but they can still afford to pay a household servant to clean/cook/babysit.
The median wage in NYC is $35k, anyone who looks down on 230% of the median wage is an entitled fool.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
By decree, we are ordered to use outsourced programming. Our core competencies are seen by our company as industry specific and coding talent is seen as general talent, like a secretary. So we end up outsourcing a lot to a firm in India.
And what we got was crap. Now the fault is not entirely theirs. But in speaking in areas where they are at fault... The code is crap. I am in charge of audting the code we get back from them and it is mind boggling bad. To understand this more, I inquired to what schooling the "engineers" had gone through. It was about trade-school level, above high school but AA degree at most, which is not sufficient given the liabilities in our industry. Still 5 coders for the price of one domestically should still have some benefit? Well a lot of that got eaten away by the QA procedures that had to be put in place. Now the code we get is tolerable, and the Indian business is on track to (if they take additional clients) become an actual Indian Business Machines. Still there are enormous challenges. After going through all the effort we did to get usable code form the relationship, I'd rather have just hired a couple domestic coders. But we would not have the QA team that they now do. True, we would not have needed it, but now that it exists it is reusable. I am not allowed to see how much internal strife there is, I only get to see what their approved output (after QA) is so I don't know how much churn there is. What I do know is 5 $20k Indians still do not equal one $100k domestic engineer.
Unless your company can weather a rocky start of a relationship like this (who can these days, especially when things are outsourced to be done faster) I don't recommend outsourcing. We still won't let them in our core code base because we need expert code, but they are free to write extensions to the core.
Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
Exactly. Individuals differ, and price differences allow you to buy higher in the market overseas.
I think the Slashdot hivemind would like to think that all coders are the same, but... in my experience, looking at the individual's abilities and qualities is the most important criterion for hiring.
All other stuff, like degrees and experience, are proxies for that. How good of a coder is this person?
There's also a lot of obscuring this scale through trendy knowledge, like the huge influx of people who are good at PHP or Ruby but not very good at practical problems outside the web.
Nope. I'm a CEO. What does get your job done faster though is hiring that really bright coder 12 timezones away with good English skills at local prices that are "sky high". Intelligence isn't limited to the USA and grabbing that talent before it fleas to a country with better conditions can pay off big time!
Well, this is likely to get me marked troll, but ...
Somehow I'm doubting your Ivy League Education which landed you your position as a CEO.
Perhaps it's your spelling of "flees" as "fleas".
You strike me more as a somewhat less educated sock puppet, and/or a non-native English speaker who has not bothered learning English well enough to communicate at the level a CEO must communicate in order to be an effective show pony for the board of directors. Nice attempt at passing yourself off as a CEO in the US, though.
From what I recall, tech support workers earned about $8000-10000, and new programmers may earn that little (and many intern for 3 months to a year), but most with 2+ years of experience are a bit more expensive than that. About 5 years ago, we were hiring average workers and it was around $15k-16k by my guesstimate, but due to poor quality and attrition I've heard we usually hire better workers and get about 2 for each US worker now, prompting a move to China, where we get 4.
I know someone from IBM whose entire department was slowly shipped over to India.
What happened is they transitioned to a few managers in the US who knew how to manage Indian workers. The way to do it is to be able to give very detailed instructions on what you want the Indian team to build. So now they have a few managers in the US, managing the workers in India. Note also that IBM does have a few teams of very good programmers here in the US, the kind that work on things like Watson.
This may sound bad, but remember the quality of the average IBM programmer here in the US wasn't very good. They are slow to get things done, mainly do boring maintenance programming, etc. So in the net, IBM probably gains from this, even with the problems of India.
"First they came for the slanderers and i said nothing."
I agree with you, I am an Indian, worked with IBM on a global team, and was not involved in service delivery. But I don't fully agree.
The Indian education system is geared towards knowledge assimilation, not application of concepts. Therefore, you will find people who can rattle off the concepts, but cannot creatively use them. Also, it's also important to understand the business and social context of technology, and not just the spec list to really get to a point where you begin contributing into the next wave of what will be adopted into the mainstream.
What I don't really agree with is the statement around nights up leading to patchwork, since it generalizes everybody's individual capabilities into the same bucket.
As for the critiques, I have seen American IBM workers that are:
1. Not willing to take up a responsibility that does not fall into their core mainstream. Read - not willing to take a risk unless it means a career move. At least Indians are willing to learn. And if the quality of work is so low, then it's because the American guys were not willing to take a risk and learn something new, so new hiring would need to happen.
2. "It's 6 'o clock EST and I'm going home. I don't care how important your deadline is, I've got other things to do" - Indian peers are far more accommodating
3. "I don't care about scheduling calls at 2 AM your time because I know you are cheap labor willing to be exploited" (actually most of us are, because you can't afford a house, car, family, life and any semblance of a vacation expense on an Indian salary with a single breadwinner for the family, so we try really hard not to screw up)
The rate of interest for a home loan here is around 11%, the bank does not give you more than 80%, the rate of interest of a personal loan is around 21% (including all components that you pay) - contrast that with your housing market. In the current market here, the property rates are around $90 a sq.ft. A simple calculation will tell you that someone making $17000 simply cannot afford to buy a 900 sq. ft house here anymore. 900 sq. ft is a pigeonhole compared to the houses you live in. And that is the state of the relatively more skilled people in the Indian workforce. Do you blame us for trying hard to please our employer? That is the reason we work nights, and take risks to learn new stuff. At least we're willing to "ramp up"
For a parent to send their sons and daughters to even an average institution (read not Yale) means their entire life's savings. I didn't have lab access to a DSO in my college, so I improvised with pspice - some of my peers were not so resourceul, maybe you refer to them when you talk about lack of concepts. And you are right. RTFM is key - not a lot of Indians do that (they try the RTFppt route, but ppts don't really say that much).
There are far too many people here, too much competition, and too few avenues to succeed. You guys don't know how easy it has been for you so far. Shouldn't blame the world economy for catching up.
Alliance@IBM = Communications Workers of America: http://www.endicottalliance.org/
The Communications Workers of America: http://en.wikipedia.org/wiki/Communications_Workers_of_America is a labor union for communications and media workers; if you read the previous link, you'll see that it's the largest, with about 700,000 employees under their purview.
I'm rather certain that software engineers don't count as communications workers, although I'll agree that communications workers are being displaced, as more and more telephone companies turn into providers of dumb internet pipes.
The interesting thing to note is that their dues are typically set to about 1.3% of your gross pay: http://www.cwa-union.org/pages/what_does_cwa_mean_for_att_mobility_employees , are not tax deductible, and get deducted from your post-tax pay.
Now the fun part! For a typical salaried software engineer in California, between state and federal income tax, you re paying nearly 50% of your income in taxes. The average salary for an engineer at IBM in the US (average, meaning band 6) is ~$100,000/year. So that works out to $1,300/year in union dues, if they are successful, which is ~$2,500 of your pre-tax dollars, or double the 1.3%, were it taken off your net, instead.
But the really fun part is what 120,000 workers at IBM being unionized would mean to them: 120,000 * $1,300 = $156M/year in additional income to the union.
I'm guessing that these people are either used to dealing with people who are bad at math, unlike engineers, or they believe engineers are fairly gullible, and can be used as a replacement source of income, as their traditional milk cows run dry over time.
NB: For full disclosure, I was a band 9 engineer at IBM before leaving them, and the CWA picketed our offices, which were the offices of a small company which IBM had acquired, to try and unionize us, as well. They had not a chance in hell.
Back home IBM is one of the top 10 companies utilizing H1-B visas.
And companies keep complaining they can't find enough locally grown peasants with the skills they need.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
IBM sells mostly services/software to corporations...which have a ton of money to spend, regardless of employee salaries.
My God can beat up your God. Just kidding...don't take offense. I know there's no God.
My answer has the potential to come off as a troll, but here goes: socialism.
The political elite don't care as long as the lazy, poor and retired continue to the vote them back into power. Screw the working class that is currently paying taxes.
It is a short-sighted view that cause harm to everyone in the end.
Bearded Dragon
Yeah, last time they offered me a software engineering position, it was for $30K a year less than the manual tester position I was in at the time. That was only three or four years ago, and they'd already lost everything that made them such a desirable company to work for. They might have been able to offer significantly less than market back when they had awesome benefits and a pension plan. That stopped about the same time that their philosophy that "We answer to our employees, our customers and our shareholders, in that order" did.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?