Global Location Analysis: Landscape update


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Today, business leaders of various MNCs are focusing beyond domestic workforce and skilled immigrants as part of their talent acquisition plan. This stands true not only for large corporations but for all organizations (irrespective of size) that are creating & managing remote, virtual teams to remain competitive in the marketplace. However, any business case on globalization can’t be complete without a clear evaluation of talent ecosystem in the outsourcing destination.

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Global Location Analysis: Landscape update

  1. 1. Zinnov Management Consulting Global Location Analysis Landscape update 2011This report is solely for the use of Zinnov Client and Zinnov Personnel. No Part of it may be quoted, circulated or reproduced for distribution outside the client organization without prior written approval from Zinnov.
  2. 2. SCOPE This report is intended to provide country wise talent pool analysis across key global locations (highlighted in the map) The report will focus on the following domains  IT Services  Product development (Hardware & Russia Software)  BPO  Technical support The key dimensions for analysis for the Egypt India China above domains include Vietnam Philippines  Expected and projected talent pool Malaysia  Service Insights Brazil  Annual salary  Attrition  Hiring Insights – challenges, career Argentina motivators etc.PREVIEW REPORT The current document is a preview to the complete study and covers two locations, Argentina and India, on talent pool aspects 2
  3. 3. Zinnov’s Country-wise talent pool analysis Russia Egypt China India Vietnam Philippines Malaysia Brazil PREVIEW REPORT  The current document is a preview to the Argentina complete study and covers two locations, Argentina and India, on talent pool aspects 3
  4. 4. Argentina is distinguished by its highly-educated talent pool, attractive costs, andvarious well established IT brand names Expected Talent Landscape Transition 100000 30 80000 25 Talent Pool 2008 20 60000 Projected Talent 15 Pool 2012 40000 10 Service CAGR 20000 5 0 0 IT Services BPO Tech Support PDS PDH Service Insights IT services sector specializes in four strategic areas:- Agribusiness, Digital Content & Internet Related IT Services Solutions, Healthcare, and Value Added IT Services IT players like HP, Oracle and Cisco are seeking to consolidate their regional back office and customer- BPO service operations in Argentina Argentinas aggressive promotion of Software Development Centers has seen its software industry growSoftware Product Development 2 to 3 times as fast as the overall economyHardware Product Development There is low availability of talent in the Hardware product development domain Leading Hardware and Software product companies have set up captive shared services centers to Technical Support provide enterprise technical support to their clientsSource: Zinnov Analysis 4
  5. 5. Except for product development, all other IT domains are facing less hiring challengesdue to abundance of quality talent Top 2 Career Deciding Parameters Annual Salary and Attrition 18000 18 Compensation Brand Value 16000 16 14000 14 12000 12 10000 10 Hiring Challenges 8000 8 Average Salary (USD) 6000 6IT Services PD (S&H) Tech Support BPO Percentage 4000 4 Attrition Rate 2000 2 0 0 IT BPO Tech PDS PDH Services SupportModerate Severity High Severity Low Severity Low Severity Hiring Insights• Like any emerging market, Monetary Compensation is a key motivating factor for Argentineans. Brand name is given high importance and Argentineans generally prefer to work for well known foreign companies, , which provide work environment of international standards• Availability of talent along with relatively lower hiring costs makes hiring for high-end tech support and BPO less severe• The cost of operations and compensation are much below those in Mexico, Brazil and Chile. However, in tune with the market demand, compensation as well as attrition levels have been increasing• The time advantage is believed to be the main reason for the low attrition rate in BPO. Currently, attrition levels for the IT-Services, Tech- Support and Software product development is on the higher side due to rising competitionSource: Zinnov Analysis 5
  6. 6. Zinnov’s Country-wise talent pool analysis Russia Egypt China India Vietnam Philippines Malaysia Brazil PREVIEW REPORT  The current document is a preview to the Argentina complete study and covers two locations, Argentina and India, on talent pool aspects 6
  7. 7. India’s excellent social, political and economic conditions along with high penetration & usage of technology makes business operations in the country convenient Expected Talent Landscape Transition Annual Salary and Attrition1600000 301400000 18000 35 25 Talent Pool1200000 16000 30 2008 20 14000 Average1000000 25 Salary 12000 (USD)800000 15 Projected 10000 20 Talent Pool600000 2012 8000 15 Attrition 10 6000400000 10 Service 4000 5 CAGR 5200000 2000 0 0 0 0 IT BPO Tech PDS PDH IT BPO Tech PDS PDH Services Support Services Support Service Insights IT Services Application Development and Maintenance constitutes to over 70% of the total IT services market in India BPO Currently, the BPO industry stands at USD 9.4 billion and employs approximately 600,000 professionals in India Software Product Revenues from software products for India based software product companies is expected to increase by about Development 40% till 2012 Hardware Product There are over 45,000 professional working in HPD in MNC R&D centers Development Technical Support Tech Support talent concentration is higher in cities like Bangalore, Pune & Hyderabad Source: Zinnov Analysis 7
  8. 8. The country’s large pool of young talent between the ages of 15-64 is one of the key drivers of the economy Filter 1 Filter 2 Filter 3 Population Above the Employed Population Sector Labor Force Distribution Legal Age Analysis Industry: 13%1.15 billion 516 million 480.3 millionIndia’s Total Legally Employable Working Population Population Population Agriculture: 55% Services: 32% 3000 Fresh Talent Pool Growth (CAGR 15%) Talent Pool Insights: Talent Pool (in Thousands) 2500 • Relaxation in labor laws is reducing employment gap between organized and unorganized sector 2000 • Over 60% of the projected labor force growth is occurring in age group of 15-64 years 1500 2008 • India has a large resource base in terms of young 2012 population which can serve as talent pool for business & 1000 technology • The IT and ITES sector is estimated to presently provide 500 direct employment to more than 1.9 million professionals 0 Engineering Commerce Arts Science othersSource: Zinnov Analysis 8
  9. 9. IT services and BPO are the largest domains within the Services talent pool as thesesectors are relatively more mature in India IT Services (833,198) BPO (911,154) 9% Application Development and 12% F&A 8% Maintenance Application Testing 41% 10% HR Infrastructure and 31% 57% Application Support Marketing/Sales 16% System Integration 16% Others Product Development (273,836) Tech Support (139,293) Software Application Development 28% Customer Support 36% 45% Embedded Software 72% Engineering Design & Enterprise Support 19% DevelopmentSource: Zinnov Analysis 9
  10. 10. India has put considerable emphasis on up-grading its talent pool not only in ICT sectorbut also in other booming sectors Hiring Challenges Career Deciding Parameters IT Ser PD (S&H) TS BPO Availability of Resources  Most employees in India puts lesser relevance to perks and rewards compared to job content, training and development opportunities. However, compensation remains a key Regulatory Constraints consideration in job selection  More than brand name, the work force in India is influenced by Quality of Talent the organizational culture/work culture  In India, having a long-term career is considered positive and Skill Specific Competency stable. Frequent job changes are viewed negatively. Therefore, high importance is given to commitment level Cost of Hiring Overall Assessment IT Ser PD (S&H) TS BPO High Severity Moderate Severity Compensation Low Severity Non Severe Brand Value • Availability of talent & business ecosystem of Bangalore, Pune, Career Growth & Hyderabad makes it an ideal location for IT, BPO, Tech The people we work Support & Product Development operations with and for • India expertise is High in BPO, Tech Support & Financial Services but low in Hardware and Software Product Work Quality Development • Across all domains, Bangalore and Pune remain the highest Work Culture paymasters followed by NCR and Hyderabad respectively Very Important Important Less Important Least ImportantSource: Zinnov Analysis 10
  11. 11. Additional Information The full report provides country wise talent pool analysis across the following other key global locations  Brazil  Egypt  Russia  China  Malaysia  Vietnam  Philippines Full report on country wise talent pool analysis can be accessed at  Zinnov ‘s Global Location & Talent Pool Portal. Sign up today for a free trial account  Or, email us at 11
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