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Are more Indian techies moving to MNCs’ captive centres as H-1B dream sours?

The Donald Trump administration’s clampdown on entry of foreign workers has meant that techies have very limited opportunities to work in the US. This has made captive centres, which offer better pay in India, more attractive.

December 09, 2020 / 01:24 PM IST

Sridhar (name changed), a techie, recently joined a global in-house centre (GIC) in Chennai after working at a leading IT firm for 10 years. He needed a better remuneration package, which IT firms were not offering. The opportunity to work abroad, which makes IT jobs attractive, has become uncertain due to the H-1B issue and also because of Covid-19. “So, I looked for opportunities and when I got a chance, I moved,” he said.

Sridhar is currently earning Rs 9 lakh as against Rs 7.5 lakh earlier. His peers in the captive centre, he said, earn as much as Rs 15 lakh or more for the same experience, something he had missed out working in IT.

Sridhar is not alone and this trend is not entirely new. However, the number of people shifting from IT companies to GICs is seeing an increase, say experts.

Moving to captive centres

Vikram Ahuja, co-founder, Talent500 by ANSR Consulting, a staffing firm, said that over the last couple of years, the company had witnessed an increase in interest among techies employed by IT firms to moving to captives.


“I might not be able to give an exact number. But in our company, if the number of applications from IT services employees for positions in captives stood at 30 percent of the total a couple of years ago, now it accounts for about 50-60 percent,” he said.

There are a couple of reasons, said Ahuja. One, over the last couple of years, it has become clear that the possibility of travelling to the US working with an IT services firm has come down and this has made GICs attractive even if a chance to move abroad is slim at best with the latter.

Since the Trump administration took over in January 2017, scrutiny over H-1B visas, the coveted visa among techies, has increased. Over the last few years hundreds of techies have had to return to India as visa-renewal rejections mounted. Now, at the back of Covid-19 and with remote working gaining traction, IT firms have increased offshoring, with resources moving to low-cost countries like India.

Sunil C, Head – Specialized Staffing, Teamlease Digital, a staffing firm, said that onsite opportunities are likely to come down by 20-30 percent in IT services firms in the coming years.

For techies moving to captives is now an attractive prospect. Take, for instance, Vedant (name changed), who has been looking to move to a captive over the last few months. While settling abroad was not a dream unlike many, he was open to it if he got a chance. “It is looking bleak right now, despite me having a valid H-1B visa,” he said.

For captives, too, talent from IT services is cheaper than recruiting from multinational companies.

Attractiveness of captive centres

It is not just salary that attracts people to captives though. Take Sridhar, for instance; while he earns more now than what he would in an IT firm, the projects he works on are also more challenging and dynamic. Sridhar is more involved in the policy making process, which would never happen in an IT firm.

“Recently, our company changed the leave policy and some of us were chosen to help them in the process. So, every time there is a change or new policy, some of us are involved. It feels inclusive. It is impossible in a typical IT firm due to the sheer number of people working there,” he explained. The captive he works at employs about 500 people.

Career progression, too, is a lot clearer in captives than in IT firms, he added.

With captives growing, opportunities to find jobs with them will increase as well, especially for top talent.

If more people move to GICs, Pareekh Jain, founder, Pareekh Consultancy, said that it would be a challenge for IT firms to find top talent since the competition for local resources would increase. Without the carrot of onsite deployment, IT firms will be vying with captive centres and startups, who pay more for top engineering talent.

This would mean that to attract talent, IT firms would have to change their compensation package and provide a clear career trajectory for top talent, Jain said.

However, these are unlikely to change drastically in a short time, said staffing industry experts, since opportunities in captives might not be as big as with IT firms.

Captives employ only about 12 lakh people of the 45 lakh workforce in the IT industry, in about 1,400 centres. However there are more MNC firms looking to set up centres in the country in the coming months and that should open up more opportunities.
Swathi Moorthy
first published: Dec 9, 2020 01:24 pm

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