IT services company Accenture Ltd. will have more employees in India than it does in any other country by the end of August.
The company will increase its workforce in India to 35,000 people by Aug. 31, the end of its fiscal year. The increase in staff in India 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 CEO, 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 people 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 workforce in India even as it is seeing strong growth in outsourcing worldwide. Outsourcing has become a standard practice for reducing costs and improving the quality of 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 are cutting their 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% of Accenture's revenue comes from outsourcing, he added. The company offers IT and BPO services from India, and it's 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 Corp. and Capgemini SA, are expanding fast in India, helping push up wages and attrition rates among software professionals and BPO staff in the country. Accenture said its staff turnover rate in India is in the "mid to high teens" and is consistent with its global attrition rate of about 18%.
Accenture is expanding in other locations outside of India, including China, where it has deployed four Indian managers at an operation with 3,700 employees. "There will not be another phenomenon like India," said Green, adding that no other country will overtake India in terms of number of employees for at least 10 years. The company is expanding in other countries to acquire technical skills and expertise in languages other than English, and to be closer to customers, Green said.
The company has set up service operations in Eastern European cities like Prague and Bucharest, but won't be able to expand its workforces in those locations easily, said Basilio Rueda, senior managing director of Accenture's Global Delivery Network. The cost of labor in those locations is far higher than it is in India, he said. The centers in Eastern Europe are being set up as near-shore locations for customers in Europe, Rueda added.
For at least the next eight years, staff salaries in India will be cheaper than salaries in most other locations where skilled workers are available.