Thanks for sharing this valuable news.
Problems of this kind arise because of demand and supply gap. When there is more demand than the supply obviously the prices come down. This is the simple law of economics applies to labour market as well.
Secondly, the whole IT industry thrives on wage differential between India and their counterparts in US or Europe. Nothing new about it.
Thirdly, why some activities are outsourced? These are outsourced when these of low-value. Be it US or European country, they retain with them the core business activity or high-value activity.
Most of the Indian IT companies are service companies. They did not scale up on the value chain. Be it Java or IBM or SAP or Oracle none of it is Indian company.
In a way direct colonisation has gone. We call ourselves independent. However, this is not economic independence as such. We have to to a long way.
Dinesh V Divekar
While Dinesh V Divekar is right w.r.t. the Demand-Supply gap aspect of the corporate/industry, I think the core of the issue in such situations is MORE OUR Indian psyche--by nature, we are pretty comfortable with whatever we get on the platter.
Nothing wrong per-se in this approach towards a profession or even life, in general. But WE FAIL TO CALIBRATE our approach to suit the target situation. When the other guy [in this case, Company--Oracle] takes advantage of us or our attitude or our weaknesses, then we blame him/them--forgetting IT'S WE WHO GAVE THE CHANCE to be taken for a ride.
It's like saying 'I will give all the chances in the world to take me for a ride......BUT you should be goody goody & prove me wrong'. Unfortunately the World doesn't work that way I guess.
The best current example would be the Devyani Khobragade--New York Consulate Diplomat--case: we took many things for granted vis-a-vis the US laws [which by nature is a highly legalistic society.......IF you don't carry/have your ID papers, you just DON'T EXIST on the face of the planet--so the story goes in USA] & extended many facilities to US Diplomats in India--despite none of them being reciprocated by USA for our Diplomats in USA. It takes a whammy case like Devyani to wake us up of our slumber--at least as far as the diplomatic fraternity is concerned.
Let's take the case of China--they have equally, if not more, low-cost labor in many fields, like us Indians. But does USA--or any other country for that matter--dare to take any Chinese national for a ride?
Food for thought I guess.
While not being critical of their opinion or being judgemental, and agreeing with the comments above, and their right to have their own opinion on an issue; I feel dismayed and disappointed, even appalled at the reaction; or rather the lack of it !!
Mr. Divekar readily accepts that Wage differential is justified or rather the crux of the advantage that India has in Outsourcing.
Mr. Saswat seems satisfied that its a case of firing of an Spanish employee, and not an Indian employee; and there is no angle of the matter pertaining to India or Indians.
While I don't wish to be critical of their own viewpoints; however; what I wish to point out is that - this case is different and unique !!
(Unique because a manager from Ireland working for an American company, in Spain has been fired over his support for an Indian engineer who was called or transferred to US!! The number of countries involved can be seen !!)
This is not a case, where the work has been OUTSOURCED TO INDIA and within India.
This is a case, where an Indian engineer working in India, is transferred by the Company itself to its office in California, USA.
Its not a case where an Indian Company is sending its employee ON DEPUTATION to an American company in USA; known colloquially as BODY-SHOPPING, something that can be aptly translated in Hindi as "Bandhua Mazdoor" or Bonded Labour !!!
In such cases, one can understand that Indian companies take advantage of Outsourcing by offering low salaries to its employees, which are adequate in terms of Indian salaries.
Here, the question is - IN AN MNC, WHEN EMPLOYEES ARE TRANSFERRED FROM ONE NATION TO ANOTHER; WHAT SALARY SHOULD THEY BE PAID for similar work and designation ???
If an American is sent to INDIA; would he be paid SALARY AS PER INDIA ??
Would not an American DEMAND SALARY as per his American standard or what he was getting there ??
So he would definitely go in for SALARY in India or USA, whichever is Higher !!!
Similarily, If an Indian is TRANSFERRED TO USA; should he get a bit higher than hiss INDIAN SALARY; or similar to WHAT HIS COLLEAGUES IN USA are getting ???
These are very IMPORTANT QUESTIONS !!!
Apart from ECONOMIC or Business implications; these also have geo-political implications.
This question becomes more important when we consider that day by day the number of MNC working in overseas countries are increasing.
Fortunately, or unfortunately for we Indians, there has been a recent high-profile case of an officer of Indian Foreign Service - a diplomat; wherein the question of paying Minimum Wages to employees, as per the rule of the land; has come into limelight. This again questions the Compensation packages to be paid to employees of one country in the country where they are working.
Since Reward and Compensation planning is an important aspect of HRM, even though an average HR may not have much involvement in it esp. in cases of Trans-national employees; it would be worthwhile to explore and study.
Very recently in CiteHR, there was a thread wherein an HR from Textile and garment industry was looking for Bangladeshi workers. Also, there was a thread where in a Recruitment Consultants had advertised for jobs for Vietnamese workers.
It is also well-known that Chinese technicians and engineers are routinely coming down to India in Infrastructure Projects.
We need more introspection and views from more and more senior HR professionals on this issue. As such issues shall be gaining importance in the coming years as boundaries between countries keep on disappearing and more and more employees keep on crossing the doorways.
I request a bit of brain-storming and more views and opinions on this.
Thanks for your comments. It exactly echoes, what i had in mind !!!
In fact, I had prepared my comments a few hours back, but was unable to post it. So I had saved it and am posting it now.
Its amazing to see how we have taken up two exactly similar examples :
- one of the Indian diplomat
- another about Chinese workers.
Seems our thoughts are wired !!!!
I guess it's called 'telepathy'..............seriously :-)
I noticed this aspect w.r.t. quite a few members in CiteHR over the past few years......with views tallying with just a few moments difference in the response postings, despite being miles apart.
No wonder the Saying goes: "Birds of the same feather flock together"--whether it's for positive causes or negative :-)
Coming to the issue under discussion, there's still a lot of realistic practice of Demand/Supply mindset....everywhere including our own homes.
If we find tomatoes being sold for a lesser price @ some vendor, don't we go to that vendor rather than another where the prices could be higher? And IF we get to know that the prices are much much lower @ a vendor who is a few miles away, don't we do some sort of cost-benefit calculations & go the whole distance to buy a few extra kilos to last for the whole week?
I don't find any difference between the general direction of this topic & the example I mentioned above--EXCEPT the difference of scale & geography.
And again....I don't find anything wrong per se in such an action--AS LONG AS the lower price [in such a case] is willful & of 'his-own-accord' by the vendor. That's where the WHOLE difference lies I guess.
I guess HR professionals in such Organizations have a large role to play to course-correct such lop-sided/incorrect practices in bringing about the Balance among peer salary levels across borders & levels. This surely wouldn't happen overnight--but unless a beginning is made, there's no way the imbalance is corrected in the long-run.
I have seen many cases where the HR forces a candidate for a lower salary than those within the company @ the same level AND despite the budgets allowing for a higher salary than what is negotiated [the presumption being that the HR is saving a few Rupees/Dollars for the company]. The fact that the candidate agrees for a lower salary due to his/her personal compulsions is taken advantage of....HERE IN INDIA. So why crib about what a US Corporation does...when we don't even practice such Equal Opportunities/Wages norms @ home?
I have also seen Indian Companies that practice the Equal Opportunities/Wages Principles with such ado even when the candidate was ready to take a lower salary--"you deserve a higher salary than what you want based on your interview performance".....sometimes the salary being ~30-40% higher than what was expected by the candidate over & above the general hike when someone changes a job.
So it all depends on the ethical & fair-play mindsets/values/standards of those @ the top of the Companies/Nations/Entities/Families---which invariably percolate down-the-line.