software outsourcing

A blog related to software development company and offshore software outsourcing

Tuesday, June 21, 2005

Indian software outsourcing companies battle to retain staff

Problems faced by software outsourcing companies


Software Outsourcing Indian companies are facing growing challenge of maintaining the employees, although they hire tens of thousands every year. Many software development companies in India are seeing half of their software programming staff getting replaced in a year. Almost all companies are facing this as their major problem. For software outsourcing Indian companies, staff costs over 50% of the total cost and this high attrition rate is leading to higher rise in employee salaries.

Damage because of staff attrition in software outsourcing


But real damage is not just the cost of lost staff but lost business for companies because when key employees leave, they take knowledge with them of existing development. Because of that, it becomes difficult to complete project intimae and in budget. Which can also lead to loss of business? Because of this, demand of quality programmers for offshore software development is outstripping supply.

Solution for software outsourcing companies


Many software outsourcing companies are providing free transport, subsidized meals, housing and entertaining environment to their employees. But this is not proving to be enough. This high attrition rate is proving to be obstacle and limiting growth of many companies. Because pool of good software programmers is very limited. Because of this, many companies around Bangalore, Bombay or Delhi are trying to fan out to other cities where expectations are lower because of less opportunities.