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India – Recruiters increasingly shun expats in favour of local talent

02 August 2013

The weak rupee has resulted in Indian companies requesting that recruitment firms source local talent, instead of seeking expertise from abroad, according to the Economic Times India. Conservative estimates from recruitment agencies and HR professionals estimates that expatriate recruitment has fallen between 15-20%. A situation that is not expected to improve in the near future.

Rajesh Kumar, CEO of MyhiringClub.com, a recruitment tendering platform, said: "We have seen some decline in expat hiring activity at the beginning of the year. Due to several factors, expected decline this year would be 15-20%. Before that, expat hiring was increasing at 10-15% annually during the past five years."

According to MyHiringClub.com, which does a quarterly study on hiring of expatriates and non-resident Indian professionals, India currently has about 46,000 expatriates (not including those of Indian origin), of which about a ninth are from the US. The number is down from about 49,000 last year.

Jobs data suggest that the hiring of expatriates has fallen across sectors. The Telecom, Fast Moving Consumer Goods /Fast Moving Consumer Durables, Pharmaceuticals, Retail and Automotive sectors have witnessed reductions of between -6-8%Traditionally robust sectors such as IT & Information Technology-enabled Services sector (ITeS) have experienced drop of -11%.

In India, the hiring of expatriates in sectors such as Infrastructure, Life Sciences, Airlines and Retail is mostly driven by the shortage of homegrown professionals. Expatriates are seen bringing in expertise and help shore up bottom lines

Balchandra Variar, senior partner of executive search firm Transearch, commented: "Now expats are getting hired only when the stakes are high, like when certain companies are making big investments and want expats to come in with expertise. The first preference is for Indian-origin people who have worked abroad and are now looking to return."
Shiv Agrawal, managing director of ABC Consultants, agrees. "Even multinational outsourcing firms, which would have expats in many verticals, now prefer Indians," he said, adding that taking into account accommodation and schooling, an expatriate's salary at times adds up to twice that of the Indian counterpart.”

While an expatriate's salary may be an important factor in shaping hiring decisions, it may not be the only one. "It's a question of sentiment. People are going slow," said an unnamed recruiter, citing the case of a multinational networking major that has seen the number of expatriates on its rolls in India dwindle to a fifth. Firms have also started telling recruiters to stay low on expatriates.

Referring to engineering services firms, Kelly Engineering Resources Director Amresh Ganeshan said, "If they have expats on board, their costs go up, and this in turn means they cannot bid for a lower price. Today, an expat's salary would be USD 600-800 per day, while that of an Indian, or a returning one, would be 30% less."

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Jeanne Heydecker 08/02/2013 09:53 am

That number is ridiculous. Expats have to make a minimum of USD $25,000 to merit a work visa in India. Most expats don't make anywhere NEAR the $600/day you state. Where did you get this number? If someone works 21.5 days a month, are you saying they earn $12,600 a month? Completely absurd.

I'm an expat who's been working here in India for over six years, with a number of Indian firms expanding globally or driving the bulk of their revenues from the West. What I see is a sea change where India is starting to look inward, at its vast domestic markets where that expat expertise is not as valuable. I think this is more a response to the global economy than anything else. With a weakening rupee and a slowing domestic economy, this was an expected outcome.


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