Why India Still Has An Edge In Software Development Outsourcing In 2022, Despite Skill Market Disruption

Why India Still Has An Edge In Software Development
Outsourcing In 2022, Despite Skill Market Disruption
The pandemic affected the whole world, straining several people in the working class. Fortunately, IT talent could work
remotely and not just locally. In recent years, organizations worldwide have been turning to Indian IT outsourcing firms for
their tech needs.
Though India is known for its cost advantage and the largest pool of IT talent, it still suffers from post-pandemic shocks to
this day.
4.3 million people resigned from their jobs in August 2021 alone, according to the Bureau of Labor Statistics, an increase of
242,000 from the previous month. In September 2021, the number reached 4.4 million.
Current Skill Disruptions In The Labor Market
If you consider outsourcing software development projects to India, you should not focus solely on India’s edge in
software development.
Outsourcing is not without challenges or risks. Therefore, it becomes prudent for a prospective software development
outsourcer to mitigate the risks by identifying the challenges.
Location is no longer a bar: More remote opportunities for IT talent
In the pre-pandemic era, Indian IT talent typically was restricted to various IT hubs in major cities and the March-2020
national lockdown opened new horizons for IT resources. Initial few months went into adjusting to this work-from-home
culture for companies as well as employees, but this became a boom for employees later on as they had access to all IT
companies not only in India but globally who allowed work from home as new normal indefinitely and they start hiring
people from any part of the country. The IT talent leveraged this phenomenon to their advantage. It led to great
resignations and most of this IT talent held at least 3 offers, still exploring a higher offer till the last date of notice in the
current company, leading to doubling and tripling of the IT resource cost in India.
Attrition Rate
The attrition rate in India is not something to overlook. A high attrition rate isn’t new in the outsourcing industry in
India, primarily due to the long working hours, monotonous jobs, low perceived value, and low-efficiency levels.
Attrition rates are pretty high in some IT service providers, reaching 30%. At Tata Consultancy Services (TCS), the
country’s largest IT company, attrition was 11.9%, up from 8.6% in the April-June quarter.

Infosys, headquartered in Bengaluru, voluntarily attrition on the last twelve months trailing (LTM) basis was at 20.1% in
the September quarter, compared to 13.9% in the preceding quarter.
This may cause some drawbacks in software development at TCS and Infosys and most likely every company that faces
similar challenges.
Yet, despite all of the above about outsourcing’s attrition rate, the benefits outweigh the slight downsides. For instance,
India’s skilled labor pool will make it easier to replace staff.
Additionally, maintaining your outsourced workers is still very possible. To properly address such arising hurdles in
outsourcing havens like India require a sound management system.
Cultural Differences
Perhaps the most challenging aspect of adapting to the Indian work culture is its distinct nature compared to Western
cultures.
Cultural differences can hamper communication. Although English speakers worldwide use the same language, there are
vast differences in pronunciation, vocabulary, etc.
Hence, researching and visiting India’s destination country must be done before outsourcing. When outsourcing your
software development project, you should be mindful of the city.
Outsourcing your software development project requires you to know who you are hiring. It starts with choosing the right
offshore team.
Outsourcing Software Development To India
Remains A Great Choice. Here’s Why
Many of the top software development outsourcing companies are based in India. This communicates the
extent to which India still thrives amidst the ongoing skill market disruptions.
There are many reasons why businesses prefer India besides the cost advantages they receive by outsourcing software
development to India.
Riding the wave of technological advancements is certainly possible through collaborating with Indian tech experts.
The reasons to outsource software development to India are several. Below are some factors accounting for
why India is preferred over other countries.
Cost-effectiveness
Let’s quickly get this out of the way, as this is one of the most common reasons for outsourcing software development to
India. Your organization will reap better profits if it outsources peculiar aspects of its business. Despite the great
resignation syndrome and exponential increase in salaries, the IT talent in India is still relatively much cheaper than in
other parts of the world, including other top outsourcing nations.
The costs associated with developing in-house applications include hiring procedures, licensing fees, software architecture
consulting, training, and development are considerably high. However, outsourcing software development to India can
eliminate certain costs.
The Indian IT industry boasts expertise and advanced infrastructure. Also, India’s low average salary lets you take
advantage of this expertise at a cost-effective rate.
India provides you with access to highly talented software developers at a low cost. The cost of outsourcing is simpler to
control as well. Additionally, since offshore providers already have an established infrastructure, the startup costs are
drastically reduced.
An IT service manager in India, for example, can expect to receive 1,500 USD per month on average. If you were to hire the
same manager in China, it could cost you 3,400 USD per month and 5,000 USD per month in Canada.
An Incredibly Large Talent Pool
In terms of outsourcing destinations in India, it has the highest concentration of diverse, employable talents, including
people with skills in cloud, analytics, social media, and mobility. Having such an ideal variety of talent makes India a
perfect outsourcing destination.

An IT service manager in India, for example, can expect to receive 1,500 USD per month on average. If you were to hire the
same manager in China, it could cost you 3,400 USD per month and 5,000 USD per month in Canada.
An Incredibly Large Talent Pool
In terms of outsourcing destinations in India, it has the highest concentration of diverse, employable talents, including
people with skills in cloud, analytics, social media, and mobility. Having such an ideal variety of talent makes India a
perfect outsourcing destination.
According to analysts, the rise in attrition rates can be attributed to buoyant job markets for techies with specialized skills
and a shift in employee perspective and work dynamics.
Access To The Latest Technologies
Developing countries offer cheap labor, so many companies outsource to them. In the meantime, these countries face a
challenge when they don’t have the technology to facilitate their work or task.
An instance of this is when geographical limitations prevent them from finding the right experts. A new product,
application, or software requires many new-age technologies.
Over 3.1 million young people graduate from top IT colleges each year in India, so there’s no shortage of technology
enthusiasts. Experts are available in almost every technology and development framework to create an innovative
product.
Whether it’s blockchain, AI, VR, data science, or machine learning, the latest technology always impresses.
The English Language Advantage
You would be in for a nightmare if you outsourced to a country that didn’t understand English, the most commonly used
language. A large proportion of India’s population speaks and understands English, which is a great advantage.
English has become so common in India that it is debatable whether it is the first or second language. However, the fact
remains that English is the first language for many people in India, especially those from the southern regions of the
country. With 100 million English-speaking citizens, India ranks second after the United States.
For almost two centuries, India has had a deep connection to the English as a former British colony. India has developed
the English language to the point where they read, speak, and understand it, at least and the English-speaking world.
Understanding the English language improves communication between the outsourcers and Indian software development
teams, ensuring a smooth workflow.
A Higher Level Of Quality
Outsourcing may improve the quality of the software product. In software development, a hasty decision can lead to
mistakes. An internal team may not wholly dedicate themselves to a new project, affecting the quality of the product. In
this case, they will not handle the development or testing appropriately.
In India, the partner maintains a dedicated team that manages both development and testing much more effectively, thus
enabling the creation of a product of superb quality.
A critical factor in reducing costs is hiring more team members than outsourcing the organization internally. You can
improve workflows and accomplish related tasks more effectively with the right resources.
Bottom Line
If you have read this far, there is no denying India is a haven for businesses looking for software development services. You
can derive several immediate and long-term benefits after outsourcing software development to India, including lower
costs, flexibility, and greater productivity.
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