I’ve lived in India almost all my life. Yet, it was at the Bangalore airport a few weeks ago that the reality of the size of our population struck me. As I made my way toward the washroom I found myself being directed by a man towards the ladies. This man was sitting on a chair between the men’s and ladies’ washrooms, and his sole task was to determine the gender of the person approaching the washrooms, and then directing them toward the respective rooms!
Unskilled labor in the country is abundant. But so are engineers, whose qualifications put them high up on parents’ lists as potential suitors for their daughters. After all a population of over a billion is bound to yield a substantial percentage as engineers.
The engineers in larger cities have sufficient jobs to look forward to — a caricature of the situation would be a young man walking around with a resignation letter in one pocket, and a job offer letter in the other. The ones in the smaller cities, on the other hand, usually find themselves having to go to larger neighboring cities in search of jobs. The ones that stay behind, often find themselves ungainfully employed.
This makes a pretty business case for the IT services industry in India, concentrated in the bursting-at-the-seams cities of Bangalore, Mumbai, Delhi and Chennai. Plagued with problems of talent supply and attrition in these cities, MNC and Indian IT and BPO companies are now setting up shop in smaller Indian cities.
Tier 2 cities such as Jaipur, Kochi, Mysore and Coimbatore, like most other Indian cities, have several institutes of higher studies, and graduate several thousand students each year. The added benefit is that staff in these cities is less likely to succumb to attrition because of fewer “good” job opportunities in these cities. Then there are cost savings to be had from low real estate and infrastructure costs.
Of course, there’s the downside as well. The biggest one is the difficulty in finding local senior and mid-level managers. Companies are coming round this by sending people from their established centers to set up processes and train staff in the centers at smaller cities.
We examine these pluses and minuses of offshoring your IT and business processes to smaller Indian cities in this month’s cover story titled India’s Emerging Cities. We go a step further and bring you a snapshot of the
top few emerging cities to watch out for. These are India’s emerging IT and BPO hotspots.
