IT services company Accenture will have more staff in India than in any other country by the end of August.
The company will increase staff numbers in India to 35,000 by Aug. 31, the end of its fiscal year. The increase in staff in India, 52 percent up on last August, means Accenture will have more employees there than in the U.S., where it will have just over 30,000, the company's chairman and chief executive officer William D. Green told reporters in Bangalore on Monday.
Most of the staff in India will be employed in Accenture's Global Delivery Network, which will have a total of about 65,000 staff worldwide by August, Green said. The company's overall headcount is expected to go up to 160,000 by August, from 146,000 a year earlier.
Accenture is expanding its staff in India even as it is seeing strong growth in outsourcing worldwide. Outsourcing has become a standard practice for cost reduction and quality services, according to Green. "There is more outsourcing work than we can do," said Green who added that the company is being selective and focusing on business that brings in a high economic return. Green also dismissed reports that companies were cutting IT budgets.
The company has identified three growth areas: business consulting; systems integration and technology, and application and business process outsourcing (BPO), Green said. About 40 percent of the company's revenue comes from outsourcing, he added. The company offers IT and BPO services from India, and is planning to train its staff there in business consulting and other areas. It has established a business consulting analytics center in Delhi.
A number of multinational services companies including IBM, Electronic Data Systems (EDS) and Capgemini are expanding fast in India, helping push up wages and attrition rates among software professionals and business process outsourcing (BPO) staff in the country. Accenture said its staff turnover rate in India was in the "mid to high teens", and is consistent with its global attrition rate of about 18 percent.
Accenture is expanding in other locations outside India, including in China where it has deployed four Indian managers at an operation with 3,700 staff. "There will not be another phenomenon like India," said Green who added that no other country will overtake India in terms of number of employees for at least another 10 years. The company is expanding in other countries to acquire technical skills, language skills other than English, and proximity to customers, Green said.
The company has set up service operations in Eastern European cities like Prague and Bucharest, but it is not possible to scale the number of staff in these locations easily, said Basilio Rueda, senior managing director of Accenture's Global Delivery Network. The cost of staff in these locations is far higher than in India, he said. The centers in Eastern Europe are being set up as near-shore locations to customers in Europe, to offer them cultural affinity, Rueda added.
At least for the next eight years, staff salaries in India will be cheaper than in most other key locations where skilled staff are available.