Global footprint of Indian firms to grow: survey
Meenakshi Ganjoo

Indian companies intend to step up offshoring, reflecting the growing global footprint of many Indian companies, according to the latest McKinsey survey.

According to the just released Global Survey of Business Executives : Confidence Index, January 2007, the number of Indian firms intending to hire staff in a different country from the company's headquarters has increased by 12 per cent from 30 per cent in September, 2006, to 42 per cent in December, 2006.

By comparison, 61 per cent of all executives globally say the majority of their hiring will take place in the same country as their headquarters, a figure that has remained almost unchanged over the past three months.

"In India, executives seem to be looking to offshore some of their own operations, after years of benefiting from Western companies doing the same," the survey says.

However, executives are notably likelier than three months ago to say that new hires working in a different country from headquarters will perform functions identical to those performed at home, perhaps indicating year-end assessments of efficiencies and costs, it said.

Overall, the survey shows that executives relatively high confidence in economic conditions remained unshaken during the final quarter of 2006, despite the upheaval the quarter delivered, and executives are hiring.

"Events such as the change in party control of the US Congress, the military coup in Thailand, North Korea's nuclear test, and the Russian government's continued intervention in oil and gas projects will not, executives," have any effect on national economic conditions or the prospects for respondents' industries.

Though confidence is little changed, there is a slim increase in the global share of companies planning to hire in the next six months, suggesting that executives may be making concrete plans for 2007.

The increase is much larger among respondents from Asia. Approximately 81 per cent of the executives in India say their company plans to hire in 2007, while 56 per cent of executives in China expect to see a growth in hiring.

Europe is lagging behind with 48 per cent and North America with an estimated 46 per cent hiring increase planned for 2007.

Compared with responses three months ago, however, executives in the Asia-Pacific region say that a smaller share of these new hires will be for new jobs and that more will be replacements for jobs in existing business units.

Executives in China and India, whose companies are likelier to hire than those anywhere else in the world, indicate the opposite.

At these executives' companies, the share of employees hired for new jobs in existing business units will increase significantly — 75 per cent in China and 67 per cent in India — likely reflecting that these countries are enjoying continued strength in traditional outsourcing industries, the survey says. — PTI