Reverse brain drain: what is luring the talent to India?
India is now seeing the phenomenon called “Brain gain”, and that too of the top-of-the-line Silicon Valley variety. Top Indian talent is moving from globally iconic American technology companies to India’s star startups across India’s geography. Homes are being shifted from Bay Area to Bangalore and from Manhattan to Gurgaon. The study shows the trend of Indian top professionals to change their carrier course from Google to Flipkart, from Disney and Facebook to Zomato, from Symantec to Snapdeal, and more. Matching dollar salaries and the sheer range of future career opportunities are the hooks India’s tech blue chips are offering to Indian talent abroad. The smart entrepreneurs have already returned, tens of thousands more will return over the next 2-3 years to be optimistic. What attracts them is a unique selling proposition of the billion dollar Indian market. Assignments like complex technology solutions for the mobile platform, supply-chain economics are interesting challenges for every rational opportunistic professional. And mind you our startups are thinking global like Zomato, whose restaurant discovery application is now present in 22 countries. For the bright talent the end goal is always excellence and this is what brings them home today.
Earlier this year in March, two of Google’s engineering VPs — Piyush Ranjan and Punit Soni — relocated from the Bay Area to work with India’s largest ecommerce company Flipkart. Both are being paid Valley salaries too — $ 5-6 million annual packages, thus wanting to attract more global talent to their team. The reason again they quoted was the tremendous opportunity Indian market has which is up for grabs. Probably they would have moved to Africa if the market was exploding there. With FDI regulations still hovering over opening the sector in India, one can’t stick to the international giants and wait.
There are cultural differences between working in India and any other part of the world but that never stopped people in search of a rich career from moving to China in the past few decades. India’s poor infrastructure that becomes a problem at times is changing fast. On the contrary these ex non residential Indian’s (NRI) might be the helping hand in bringing the money into the economy to develop the nation.
Let’s look at the statistics at the nip of the bud. As many Indian students choose to study abroad it causes a whopping $17 billion loss in revenues every year in India. On having completed their studies, only 5.2% of these students choose to return home – the rest staying, working and raising a family in their new country. Our government, which has neglected brain drain as a cause for concern for far too long, has in the recent past taken both pre-emptive and retrospective actions to curb the impact of brain drain on India. As announced by President Pranab Mukherjee, India’s 12th Five Year Plan (FYP) focuses on quality, affordability and accessibility of the higher education system. This can also be interpreted as an attempt to persuade students to stay in India for the purpose of pursuing higher education. Following China’s footsteps, the Indian government has approached various well-known NRI (non-resident Indian) scientists to place them in appropriate departments under the Ministry of Science and Technology. PM Narender Modi has also sought to attract businesses the world over to invest and manufacture in India with a ‘Make in India’ campaign. These campaigns are designed to encourage students to have the capacity and resources to conduct their research and thereby base their future lives in India. Kochi’s pioneering PPP model technology-business incubator called “Startup Village” has been fundamental in making young entrepreneurs vision come true.
The primary push factor globally that might be the reason for this brain gain comprises the extensive corporate restructuring which took place in the United States and other developed nations after the recent financial crisis. While many of the developed nations witnessed negative growth and double dip recessions, the Asian market showed remarkable resilience with India maintaining an average of 6.6% annual GDP growth rate in 2011. This is enhanced by the pro-entrepreneurship culture that has developed in India over the years where it is now perhaps more feasible to imagine an ‘Indian Dream’ rather than an American one. Furthermore, prejudiced migration policies mean that, even with requisite skills and educational qualifications, immigrants are unable to break through the glass ceiling. Protectionist measures being undertaken by various developed nations in the interest of their own citizen’s further limit the scope of opportunities for foreign nationals and lead many to consider returning to their country of origin.
As we all know money stands no less motivator in all these decisions. As per a recent market study, professionals looking to change jobs in 2015 can expect an average 25-27 per cent salary increase, more than what people got for switching employers in the last two years. Those moving to the booming ecommerce sector will get the best pay boost. People shifting to such companies from sectors such as information technology, fast-moving consumer goods and retail could see salaries rise 35-50 per cent, with stock options often taking the total increase to more than 100 per cent. Lateral hires in the financial services, IT and information technology enabled services (ITeS) sectors will get an average hike of 25 per cent, compared with 20-22 per cent last year. The skills demanded in the consumer and pharmaceutical industries, is sales and marketing skills. And in the technology industry, it is skills such as data sciences, business intelligence, gaming, digital and online marketing, and cloud and distributed computing. While the percentage of companies that are hiring or indicating no change to their headcount has remained more or less the same from the year earlier, positive hiring sentiment is being fuelled by the addition of a large number of new organizations, especially in the ecommerce and technology space.
The other angle for the “brain gain” could be from the demand side as more than 50% of all employers in India face a talent crunch, even though the incidence of firms finding it tough to hire the right people dropped compared to last year. Globally, 38% of employers reported a talent crunch, while across Asia, 48% of those surveyed said they faced a shortage of skilled workers. Filling vacancies at the top is a significant challenge for the most of the companies and yet just 38% of the firms seem to have a well-established leadership succession talent plan in place. A shocking 13% do not have any such plan at all. According to some reports, around 14% of top management vacancies remain open for more than six months, while 75% take longer than two months to fill. Interestingly, there is a very low attrition at the top and senior management levels, which indicates that organizations are better at retaining employees at leadership levels than at junior and mid-level ones. In such circumstances which rational talented professional would not jump onto this ecommerce bandwagon in India?
Leave alone our natives, a motley bunch of foreign entrepreneurs are bonding together to form various communities to lean on each other in their dream to run a business in an alien country. For example, the Expat Entrepreneurs Circle which was born some three years back in Bengaluru to provide a platform for exchanging business ideas, access to information and resources, networking opportunities and training from those who’ve met with reasonable success in India’s startup ecosystem. So after all the above point it’s not very surprising to understand the reverse brain drain is an outcome of a unique mixture of emotion, opportunity and government involvement making India an attractive destination to give the talent the next best carrier platform.