I think there’s an important shift and one that’s being missed by some. People from the developing countries are not aspiring as much to work in the western countries as one would imagine! I'll be focusing on folks in Indian IT because I’ve seen more of them but there maybe other segments which are seeing a similar trend. The job profile and what one gets out of the experience working outside is of one's own country is a bigger draw today than money. Also, the salaries and standard of living in the developing countries have gone up significantly which means they possibly enjoy a better life in their home countries than they would by going west.
We need to make a few demarcations though:
a) At more junior levels, it’s still a very good option to travel to a western/developed country. The money is better, there are good learning opportunities, exposure to a new culture helps etc.
b) Even at more senior levels, there are people with different levels of expertise. Folks with average skillsets will possibly want to take up onsite assignments because they may be stuck in firms doing very average work and at average pay.
c) Folks who are really good and with a decent amount of experience may not really be wanting to travel now. They are earning real good money, leading a good life and often would like to be with their families and bring up their children in their home country.
Category (c) is the one which some miss to appreciate. While we understand that lower costs were the driving factor behind offshoring we are also aware that cost advantages are slipping away. Indians are earning more and more in India itself. There’s a talent war raging in the domestic market. Dollars and Pounds are not the only things that are driving people.
It's really a larger context, not just about India but the general perception around Asia and Africa compared to the West. If I were to ask which are the top 3 most expensive cities from a cost of living perspective, what are the names that will come to your mind? Now that you have answered the question incorrectly :)...well, most of you I believe will get it wrong, here's the list as per Mercer. More than half of the top ten are actually in Asia and Africa including the top 3. While it may not mean a lot, it's an eye opener for some on the cost of living situation outside the western world.
What does this mean for the services companies? Often people wanted to get into services companies which would promise onsite opportunities. The craze may die sooner than later. How do services and product companies now play their cards around hiring and retaining top talent? Product companies may have the edge because they pay better domestic salaries and travel wasn't their USP. Maybe Services firms increase the differential between their (b) and (c) rank holders to ensure top bucks for (c). There are various things to consider ofcourse - size, scale, business model etc. but am simply highlighting a factor that will need a rethink of strategy.
At the executive level, the changes have already been noticed for quite sometime. Not just Asian, but even more specifically, Indian CEOs are already matching the top dollar salaries of their counterparts in the west while spending in local currency. The overall list of millionaires is also showing the rise of the rich from pretty much all over the world and more recently the number of millionaires coming from Asia has gone past NA.
There's a shift in the financial power equation across regions. This change is likely to be good for everyone and will bring in new factors into play to the way we do business.