Indian software outsourcing companies battle to retain staffTuesday, June 21, 2005
Problems faced by Software Outsourcing companies
Software Outsourcing Indian companies are facing a 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 are leading to higher rise in employee salaries.
Damage because of staff attrition in software outsourcing
But the 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 the budget. Which can also lead to loss of business? Because of this, the demand for 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 an entertaining environment for their employees. But this is not proving to be enough. This high attrition rate is proving to be an obstacle and limiting the growth of many companies. Because the 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 fewer opportunities.