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Outsourcing: Peter Harrison, CEO Of GlobalLogic (Part 6)

Posted on Saturday, Sep 25th 2010

By guest author Tony Scott

The Challenge of Finding Strong Middle Management

Tony: Are you finding it more difficult to attract and retain the kind of people you need? The services GlobalLogic provides clearly require the high end of the skill set compared to outsourced call center services, for example.

Peter: It has, but I think at the same time our brand has improved our reach and our credibility among potential hires, so I think those two have probably cancelled each other out a bit. For example, in Ukraine today we’re considered the best place to work. We’re the largest technology employer in Ukraine, sixteen hundred people. The next largest is a thousand people. So, we enjoy sort of a celebrity status in Ukraine, and it has become easier and easier to get the best people. It’s a little more challenging in India, but even there our reputation has grown as we’ve grown, so that offsets the competitiveness of the market. The greatest challenge remains at the most senior level. Finding people with eight to twelve years of experience is also especially challenging.

Tony: I’m not surprised – finding good people with solid management experience or the ability to grow into a managerial role is tough everywhere, but particularly so when you are in an environment that doesn’t have a long history of many well-established companies with great training and examples for younger people coming up the ranks to emulate. Add in a growing market that needs more and more middle management talent, the supply just can’t meet the demand – that’s what is happening in India and China.

Peter: My main point is that this is a thirty- to fifty-year phenomenon, not a three- to five-year phenomenon. People have this perception that if you don’t quickly transform yourself into a solution business, you’re toast. I do agree you have to do this, but the prophecy that outsourcing is dead, well, it is a long term-phenomenon. We’re at only the beginning of a very, very long voyage.  In India today, less than 0.2% of the population is involved in outsourcing – not 2%, but 0.2%, which is scratching the surface of just that one country.

Tony: On the other hand, if you look at the talent pool that India or any country has, it’s obvious that we can’t look at the entire population. India has a very large percentage of people living in agricultural poverty.

Peter: Yes.

Tony: If you take the number of the people who are college graduates, and to refine it further, the percentage of those who actually have the language skills you need to be effective in a role in an outsourcing company, it becomes an increasingly smaller group.

Peter: The number of U.S.-caliber graduates is small compared to the size of the entire group, but what’s important is that it’s a group that’s growing faster and faster. If five years ago there were only about 50,000 who graduated each year of U.S. caliber, today there are 150,000 who are graduating each year of U.S. caliber, right?

Tony: OK – those numbers seem plausible.

Peter: Then five years from now there will be 300,000 graduating every year of U.S. caliber. That number just keeps growing and it’s not set to slow down. There’s no reason why for the next twenty to thirty years it should slow down.

Tony: Not unless you need to start to build a bigger educational infrastructure to be able to allow for that – which may or may not happen, of course.

Peter: Certainly the raw human potential is there.

Tony: Absolutely, no doubt. Then it becomes whether or not the country invests appropriately in education. China clearly is doing that.

I know have development centers in India and China, and you also mentioned Ukraine. Are their other countries where you have R&D services centers?

Peter: Argentina. We’ve modeled ourselves on the BRICs (Brazil, Russia, India, and China). Ukraine is our proxy for Russia and Argentina is our proxy for Brazil. Otherwise, we’ve modeled ourselves on the BRIC countries.

Tony: All of those countries have relatively large populations of educated young people coming out of university.

Peter: Yes.

Tony: And all probably allow others to come work there relatively easily. For example, do you recruit non-Ukrainians to come to Ukraine to work there?

Peter: Actually, surprisingly few.

Tony: Really?

Peter: Ukraine for some reason doesn’t make it very easy for people to come and work there. It’s actually much easier for people in Ukraine to go work in India than it is people in India to work in Ukraine.

Tony: I didn’t realize that – that’s interesting.  What about Argentina? Do you draw people from the all of Latin America there?

Peter: That’s a bit easier, yes.  You definitely see more mobility in Latin America.

This segment is part 6 in the series : Outsourcing: Peter Harrison, CEO Of GlobalLogic
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