Outsourcing to India Hits the Wall

The WSJ has a story today on the shortage of technical talent in India (subscription). That guy on the phone is getting a 15% raise each year because there's only so many people to go around. It's getting worse at the higher levels. Larsen & Toubro Ltd., the subcontinent's largest construction company, loses 800 experienced engineers a year to software firms and multinational engineering companies, despite having doubled salaries over the past couple of years. Turns out only a fraction of the colleges producing engineering degrees are good enough to make someone ready to work on the global economy. The rest are out of date or crippled by political control. So even with that level demand for technical workers an army of unemployed recent graduates, estimated at more than five million, is expected to grow.

Maybe US companies should look at getting more value from the engineers who are already here instead of trying to cut costs no matter what.