U.S. RETURNEES NEED NOT APPLY,” WAS A COMMON REFRAIN in recruitment advertisements placed by many Indian software companies in the late 90’s. Their thinking was that the returnees—pampered by the good money and the “easy” life in the U.S.—would be detrimental to the company’s larger interests. Many were even worried about the effect of the returnees on the morale of the Indian teams.

The Indian software industry has come a long way since then. And companies have largely understood the benefits of tapping Indians in the U.S. to head their technical teams in India.

How the buck has changed. Suddenly, U.S. returnees aren’t just people on H1-B visas returning because they were laid off and their visas expired. Companies are willing to invest in the process of relocation and the various attendant concerns, just so they can claim the advantage of a resource that is well versed in the U.S. work ethic and has a global outlook.

The recent siliconindia career factory events saw a multitude of companies queuing up to hire people with the right technical and “people skills.” Blandishments on offer ranged from relocation assistance to flexible salary arrangements and fully-paid company accommodation in Indian metros.

So what is the reason for the volte face? What are the issues involved? Why the sudden spurt in the return to India movement that has traditionally been just a trickle? And how are companies attracting top-notch talent back?
siliconindia reports.

It’s All About PPP, My Dear Watson
When the United Nations coined the term Purchasing Power Parity (PPP), never would it have imagined that the term would be a vehicle for the sort of reverse brain drain that India is seeing now.

A few years ago it was unthinkable that Indians would want to move back to India because they couldn’t maintain a certain standard of living in the U.S. However, with compensation levels in India leaping and the cost of living stabilizing, a number of people rated savings potential to be one of the reasons for moving to India. With services being cheaper in India, people are discovering that their dollars go a long way there.

When the first PPP-weighted GDP figures made their appearance in 1993, it was determined that the PPP factor for India was 4.5. This factor has remained pretty much constant over time. This means that in reality the Indian GDP is undervalued by a factor of 4.5. Thus PPP suggests that $1 should be taken as INR10.5 and not INR46.

Thus in a country like India where services come cheap, a person earning $5000 in the U.S. would be able to maintain a comparable lifestyle if he earns approximately INR50,000.

Alok Kothari, himself a U.S. returnee and now chief of India operations for remote access management company Neoteris illustrates the point with an example. “Even at a 10-20% salary differential, the savings are much higher in India than in the U.S. Housing is a major factor. In the valley, a single bedroom hole-in-the-wall apartment costs $1200. In Hyderabad, where I live, one can get a 6000 sq. foot all-marble mansion for $700 per month. Thats a INR23000 saving just on accomodation.”

It is this realization that is spurring hundreds of valley professionals to flock to job fairs across the U.S. in search of a
ticket home. Infact, the search for a comparable—if not better—lifestyle is one of the major reasons for valley professionals to go back to India. Says Gautam Mishra, Project Manager for the ERP product practise at Symphony Services, “I had read a book about purchasing power parity and how India rates fifth in the list of the world’s largest economies based on PPP. This was the catalyst for my move.” Having come back, Mishra says he is convinced of the applicability of the PPP figures. “In a sector such as software, its high compensation levels makes being in India a better option. Salaries in the U.S. may be more, but the buying potential here for a basket of goods is much more.”

In fact many returnees insist that a person with a good IT job in India is much better off than his counterpart in the U.S. because of the nature of the industry in India. Most companies have shown a marked reluctance to lay off even when the going is tough. Soon after 9/11—when most Indian services companies’ earnings took a hit—most of the companies preferred to bench their staff rather than let them go. This is another reason cited by many people for wanting to return.

In the go-go years of the tech boom, upto 195,000 engineers were being moved from India every year on H1-B visas to fill in the shortage for qualified professionals here. But with unemployment rates in California hovering at 6.7% many engineers are facing a situation where they face the danger of H1-Bs not being renewed. To these people, the “ticket home” strategy being offered by companies to staff their India operations is an offer they cannot refuse.

Bala Arrunakarinatham is a recent graduate who came to the career factory because he is out of work and had “heard that India is hiring like crazy.” For Arunakarinatham and others like him, India suddenly is a very good opportunity. But not all relocations are H1Bs looking to avoid an uncertain economic future. One long time U.S. citizen who prefers to be anonymous moved back to India because of the sheer quality of work that happens there.

Intel’s India development center is a case in point. When the company started its India operations in 1999, it was nothing more than a five-man device drivers maintenance operation. Since then, the India Development Center has seen visits by chairman Craig Barett and President Paul Otellini—each of whom announced further plans for their India office. Both announced massive staff ramp up as well as newer and progressively more complex work to be done out of India. Intel recently announced that it would be expanding its India operations from the current 1200 strong to 3000 by the end of 2004. The company also plans to launch a “Made in India” labeled 32-bit microprocessor in the 2005-2006 timeframe. And the chip will be designed and validated in India. Many take this as the ultimate assurance about the sort of work that is generated in India.

And Intel is not alone in its plans. Microsoft recently announced plans to start providing product support and services from Bangalore on a global basis. It will begin with a pilot project for hi-end products, employing about 100 people in the next 12 months. At the same time the Redmond giant plans to more than double its manpower in India, thus raising the headcount to 500 in three years from the 200 currently.

And this is where U.S. returnees come in. Says Chandan Seernani, founder of wireless startup Hotpalm.com, “I think
there are tremendous opportunities in India. Besides understanding the business culture in the U.S., those of us experienced in the U.S. also bring the methodologies, structure and discipline to our potential employers in India. If the employer is a U.S. company, we offer our insight into the Indian way of doing things and our contacts.” Seernani contends there will also be a rash of startups in India that will recruit U.S. returnees. “For them, U.S. returnees are invaluable because of the contacts with customers, strategic partners, venture capital, board members.”

Even as Intel, National Semiconductor, Microsoft and other companies ramp up their India operations, they are looking for people with the right technical and “people” skills to form the crux of their India team. (see box: “Does compensation matter?”)

Even those who came to India in order to be close to their family agree that companies are looking for people with customer savvy and a global outlook to lead their teams in India. Satyam’s Bhargavi Nuvalla is one such person who came back to India to be close to family, but found that her U.S. experience made her a very attractive proposition for companies like Satyam.

After her graduation from Texas, Nuvalla joined Texas Instruments as a junior engineer. It was there that she first encountered the difference in the U.S. work ethic. “I found that in the U.S. people had more flexible attitudes towards young members of the team. Everyone could voice his or her opinion,” she recalls. For the next 10 years, Nuvalla worked at progressively more complex tasks at a number of companies including MCI (later acquired by Worldcom). But over the 10 years, Nuvalla realized that there was only so much that one could grow at a large company like Worldcom. “I got the impression that the senior level positions were a white man’s job.” Quitting her job, Nuvalla decided to arm herself with further degrees—enrolling for an executive MBA program at the Southern Methodist University. And before reporting for classes, she decided to take a break in India.

“Coming to India, I felt the urge to stay back,” Nuvalla says. “The software industry here was very dynamic and I saw myself being more useful here.” So she joined Hyderabad-based Satyam Computer Services as a project lead. In a little over four years, Nuvalla now heads the offshore development center of one of Satyam’s large financial services clients, with overall reponsibility over a team of 100 people.

So did the move to India work out, as far as the nature of work is concerned? Nuvalla says it did. “When I was
contemplating staying back in India, the nature of work was foremost of my considerations. After working in the U.S., I did not want to be just a technical head of a group of people. I wondered whether the business-side sort of opportunity existed in India...” As it turns out, Satyam signed her on to do just that. And in the course of four years, she has risen to a position where she has a say in everything right from pre-sales to complete delivery of the project.

Indeed, it is precisely for such roles that companies in India, both home-grown and foreign, are looking to relocate people. In a recent column written for siliconindia, Biswadip Mitra, Managing Director, Texas Instruments India says, “The only way was to set up a talent base in India by attracting U.S.-based talent back to India.” Mitra contends that returning expatriates largely fuelled the Taiwanese hi-tech revolution that saw that country rise to the top of the hardware stakes. Now Indian companies are trying to leverage this in India for software.

When Neoteris was planning on setting up operations in India, it needed somebody with U.S. experience who could hold the fort. Kothari fit the bill. Most returnees have similar tales to tell.

It was one such need that saw Sridhar Jayanthi make the move to India. Jayanthi was a senior vice president of engineering when he was accepted an offer by Network Associates. And when Network Associates was looking for somebody to head their India operations, Jayanthi volunteered to make the move. He now heads Network Associates’ India operations.

Dharma Kothanur, Senior Director for product marketing, July Systems, too was worried about the quality of work back home. After 16 years in the U.S., Kothanur couldn’t wait to move back to India. “But each time I felt that I had to leave, I would tell myself that I would never find job satisfaction there. After all, India had a reputation as a low-cost outsourcing hub. But over the years, as newer companies cropped up, I realized that that excuse no longer held up. There were a number of companies doing good work out of India. But all the noise about exporting jobs to low cost countries was drowning out the reality.”

Once he was convinced, Kothanur began to look for a product company that intended to develop the complete technology out of India. “July Systems was just around the corner,” he says.

But it’s not as if the move is a bed of roses for everybody. Returnees siliconindia spoke to cite picking up the thread of their lives as one of the biggest problems they are facing when they relocate.

Professionally Challenged?
What about professional gowth? With technology progressing at such a rapid pace, many potential returnees are apprehensive about the availablity of avenues for further education. “What are the chances that—working in India—I will be allowed to further my technical skills?” asks one.

“Typically these are issues that concern people who haven’t yet made the decision to move to India. But in this respect, most companies have their own policies. Invariably, companies provide opportunities for further enhancement of skills,” says Kothari.

Lateral Moves Don’t Matter
Kuthanur was a Director, Product Marketing at Veraz Networks, a telecom start-up based in the Valley when he got the offer to join Rajesh Reddy founded July Systems. He joined as the Senior Director, Product Marketing which in essence was “the same thing.”

“One of the best evolutions in recent times is that India is increasingly a peer center and not just an outsourcing center. So transfering from the U.S. to India is just like moving from Austin to Santa Clara,” Kuthanur maintains. Seernani disagrees. “I always look for a promotion and additional responsibilities when I change jobs, whether its in India or in the U.S.”

However, one thing is certain. The days of big promotions while moving to India are over. Invariably, companies are looking to bring people in the same rank or one step above, but with some added responsibilities. Says Jayanthi, “Moving to India is not a shortcut up the corporate ladder. It is just an arrangement to bring people with specific skillsets to fill shortages in certain areas.”

Nuvulla agrees. “The differentiator between an India-recruited employee and a U.S. returnee is only in the general outlook and the people skills. At the entry-level positions, these differentiators are not enough to warrant a promotion.”

Relocation Issues
Shishir Gupta, Senior Technical Account Manager with the New Delhi office of Cadence Design Systems had almost forgotten how bad the traffic situation was in the National Capital Region (NCR). It did not take long for him to find out, though.

When Gupta returned for good to take up his current assignment, the traffic and pollution were one of the first things he had to adjust to. “I had almost forgotten how long the queues could get. Another bother was the frequent powercuts. But when you are here with your family and your people, such issues don’t seem to matter any more,” he says.

Gupta contends that the redeeming features more than make up for the lack of certain facilities. “When my father had to undergo a by-pass surgery, we consulted more than one doctor and visited atleast four hospitals before actually going for the surgery. I don’t think even the best of cities in the U.S. has the facility of more than four good hospitals!”

Indeed for most, the heat, lack of facilities et. al. seem to be the self-justifications of the fence sitters. Says Kothari, “In terms of facilities at home or at work, there are no issues at all. Infrastructure such as roads and power can be improved but it is not really a big influence in the quality of life.”

“I was acclimatized with the way of life during my two year stint here with Emerson Electric. So when Network Associates made the offer, it was really what the doctor ordered,” Jayanthi says. As far as relocation is concerned, the only issue of any importance seems to be children’s education. “For kids born and raised in the U.S., America is home. Kids younger than high school age adjust relatively easily. They have western schools in major cities in India. Those with kids in high school have to worry about college. I believe schooling is better in India whereas college education is far better in the U.S.,” says Seernani.

Mishra agrees, “My daughter is the most vocal advocate of going back to U.S. because she misses the lifestyle.” But the
proliferation of inter-national schools and Montessori institutions has solved many of their initial worries.

Going Back
An overwhelming majority of the U.S. returnees aren’t even considering going back.Education issues or not, most people are willing to move to India just to leverage the tremendous opportunities that are presenting itself there. For a person in the project lead category, moving to India represents a chance to be part of a growing and dynamic economy, an economy where their opinions increasingly count for more.

And when economic factors such as better standard of living are considered, it is no wonder that more and more people are volunteering to make the trek back home.

In the words of one India returnee, “India is not yet the U.S. but the positive points far outweigh the negatives and we have come to a stage where India is a strong contender for Indian talent !”