IBM hunts for Indian staff

By Daniel Sorid and Preeti Mishra






BANGALORE - Plans by


IBM to triple its investment in India will make it harder for the country's

home-grown software industry to keep staff, the head of a mid-sized Indian

software services firm said.






Lakshmi Narayanan, the CEO of


Cognizant Technology Solutions Corp., said global technology companies may

try to use firms like his as hunting grounds for new staff. Cognizant spends up

to 3 per cent of its revenue training new hires, most of whom are recruited on

university campuses.






Three quarters of Cognizant's 28,000 employees are in India, though its
headquarters are in the United States. Cognizant plans to increase its own staff

to more than 35,000 by the end of the year.






The hunt for talented employees has become a hot topic for many global companies
seeking to do business in India, and wages are rising 10 to 15 per cent per year

by some estimates.






On Tuesday,


EMC Corp., the world's largest computer storage company, said it would

double its India staff by 2008, news that followed plans by International

Business Machines Corp. to invest $6 billion over three years in India.






"When it comes to companies like IBM coming here and hiring, it's clearly an
issue," Narayanan said in an interview.






Concerns about attrition, recruitment and training have led Cognizant to expand
into lower-profile technology destinations such as Coimbatore, where job hopping

is less common, and investigate "satellite townships" on the outskirts of major

cities.






Bangalore, the country's best-known technology hub, has become saturated with
companies on the hunt for software professionals, Narayanan said.






To fend off the threat of poaching, Cognizant offers senior managers stock
options and provides industry-specific training to its staff. Cognizant boasts

enough certified insurance professionals to rival almost any company outside the

insurance industry, Narayanan said.






Cognizant's growth strategy has so far paid off for its investors and attracted
praise from Wall Street analysts.






Banc of America Securities last month called Cognizant -- whose revenue is
expected to rise almost 50 per cent this year to $1.3 billion -- its top pick

among offshore information technology services companies.






Shares of the Teaneck, New Jersey-based company have risen by about one-third
over the past 12 months. Shares rose 1.6 per cent to $63.50 in morning trade on

Nasdaq on Wednesday.






BATTLE FOR TALENT





Software companies operating in India -- including
Infosys Technologies Ltd.,



Wipro Ltd. and



Tata Consultancy Services Ltd. will recruit nearly as many employees from

rivals as from university campuses over the next year, said



Gautam Sinha, the chief executive of TVA Infotech, an Indian technology

recruitment firm.






While brushing off the risk of runaway wages and reduced profit margins,
Narayanan said the hiring strategy of IBM and others would almost certainly be a

burden to the country's own software industry.






It will take at least a couple of years for global technology firms to establish
sizable campus recruitment programmes at India's engineering and business

institutes, he said.






"In those years, they're not going to sit idle. They are going to recruit from
other companies," he said. "To that extent, we believe that there will be an

uptick in the attrition rate."