Expatriates in India latest trend Reverse brain

In its literal meaning, expatriates are individuals who voluntarily move away from their native country and adopt a new residence abroad.

The meaning of expatriates in terms of business or industry is professionals who are primarily appointed by a company to protect its stake in projects abroad. An expatriate can also be a person whom a foreign company recruits in its country to manage its domestic activities. In both cases, expatriates are considered as possessing the requisite expertise and experience to head those various projects.

As the domestic retail industry in India takes off, it is desperately scouring the globe to woo people from companies like Wal-Mart, Carrefour, Tesco, etc, to provide them with the know-how of planning and executing large format stores. Industry sources reveal that top executives of these companies are currently attending interviews in India for various top management positions.

Trend towards reverse brain drain

Earlier, Asian countries often complained about brain drain. Skilled graduates and highly qualified professionals from India going overseas to Europe and the USA and other Asian countries deprived India of their talent. This phenomenon has been happening in our country since the last two decades as thousands of highly skilled tech professionals have gone to the US and contributed in the development of the US tech industry. The US is still trying to import more Indian workers, and once the quota of H1B visa is increased, more Indian tech workers will want to move to the US.

However, lately, this trend has reversed altogether. Interestingly, now Indian companies are looking for recruiting US workers.

According to Mr Warwick Brady, COO, Air Deccan, “Over the last decade or so there has been huge growth in retail marketing and the operations lying within the country. This growth can safely be attributed to the IT industry, BPO industry and the fact that major companies in the West are outsourcing their functions to India. Studies have found that 64 per cent of those who executed outsourcing services preferred India for their back-up commercial activities. This puts India inevitably ahead of its closet rivals and making it a hot career destination. I foresee India growing very fast, with more multinationals coming into India.”

Around 150 top management positions will be open to expatriates in the coming year in India. While estimates show that salary hikes in the non-IT sector will be around 20 to 25 per cent this year, salary enhancements in the infrastructure and retail sectors will be much higher, at around 35 to 40 per cent.

Earlier, expatriates were enticed by companies to work in India with the latter offering the former hardship allowances in addition to their salaries, along with other attractive perks and incentives. The situation is entirely different today. No longer is a tenure in India looked upon as a ‘hardship posting’. In fact, the expatriates’ market value, globally, rises substantially if they have notched up a 2 to 3 year tenure in India, handling huge projects from start to finish.

Despite this reversal in trends, Indians still continue to be the brains behind various foreign ventures abroad, in several sectors.

However, Andrew Levermore, CEO, HyperCITY, has an interesting insight into future trends, “Indian professionals will continue to be sought after by the rest of the world because of their very high work ethic, great commercial aptitude and determination to succeed. The desire for a better lifestyle will continue to take Indians abroad whilst living conditions remain poor in India. Having said that, I do think that the retail industry in India has the opportunity to grow quicker, larger and more professionally with the expertise of the right expats, which in turn will lead to many more opportunities for young Indian graduates to remain in their own country.”

India, an emerging hot career retail opportunity

The expatriate population is all set to double in sectors like infrastructure, retail, airlines, pharmaceuticals, telecom, apparel, investment banking and insurance, among others. Having started off as a slow trickle a few years ago, the expatriate population is now entering in full flow fuelled by the overall boom across all sectors in the economy. The IT industry is already witnessing a constant influx of expatriate and non-resident Indians into its fold. Top management positions, across various sectors of industry, are also expected to see lot of expatriates joining in.  

Brady feels, “There lie very lucrative professional opportunities for expatriates in India. There are many organisations who hire qualified expatriates living in India instead of recruiting talent offshore and salaries are competitive with international standards. Highly trained, experienced professionals from any country are valued by organisations based in India. Expatriates contribute to 20per cent of the total Air Deccan strength. The concept of ‘low cost airlines’ is fairly new in India and the country at present lacks expertise in the field which is why we recruit domain specialists from other countries.”

According to Levermore, “India is at the top of an extremely short list of countries where you can take a clean sheet of paper and build a multi-million dollar retail business almost overnight. For a professional retailer there is nowhere else that offers quite the same exciting opportunity.”

Opportunities of professional position

There have been foreigners in top key management positions since the last decade in India and the trend is accelerating now. In the coming year, approximately 1,000 positions including CEO/COO, Project/Operations Management Head and Technical Head will be filled up by foreigners and non-resident Indians.

Levermore, “The opportunities and challenges come in equally large measures. In India we are by nature very conservative and bar a few notable exceptions, completely risk averse. We would much rather let someone else try it first than risk a new idea ourselves. Westerners and western retailers in particular are natural risk takers and generally quite aggressive merchants. This could lead to a frustrating environment for some where the need to move at pace in a nascent retail industry with rapidly changing consumer aspirations is occasionally thwarted by misplaced caution.”

There are various factors responsible for an increased demand of expatriates in India. The prominent among these is the government's focus on developing infrastructure in the country.

New proposals for Mumbai and Delhi: The government has recently given the thumbs up, to the modernisation proposals of both the Mumbai (Rs 6,131 crore) and Delhi (Rs 7,961 crore) airports. With the international airport in Hyderabad also on the anvil, the demand for CEOs as well as Heads of Project Management and Merchandising, with the requisite expertise, is on the rise. A person with experience in merchandising is also required to set up the right tenant mix to make it convenient for international travellers to shop, browse, eat, lounge, exchange money etc.

Apparel industry: There is a growing demand for Italian and French designers among the domestic bigwigs in the garment business. Large players in the business also require foreign expertise to head manufacturing and operations.

Low cost Airlines: With low cost Airline companies mushrooming by the day, the demand for expat CEOs and COOs is on the rise. This is because any new industry requires importing expertise in areas where they have none.

Telecom: Large Telcos are constantly scouting around for talent from abroad to head their customer services and operations. Even in terms of setting up an all-India telecom network, there is no local player with pan-India expertise available to handle it.

Trustees: Private equity firms, investment banking, pharma and retail will see a lot of foreigners in top management slots. Most of them come as trustees of their investments in Indian companies, build a base with solid relationships and then hand over the leadership to their Indian counterparts.

Challenges expatriates have to face while working in India

Levermore, “Generally the lifestyle in India would be worse than where they have come from. Poor infrastructure, bewildering bureaucracy, multiple layers of conflicting governmental administration and corruption are just some of the challenges. Once past these challenges however, India can be a delightfully exciting place to live. Exotic, warm, colourful, India is full of new experiences for an expat family. Convenient home delivery of just about anything is just a phone call away. Plumber, electrician, carpenter is at your doorstep as soon as you need them. The best of all is the natural good neighbourliness and genuine care for a fellow human being that is common to the Indian culture. Very few, if any expats could claim this to be the same as their own culture.”

An expatriate - in comparison to an Indian professional

Levermore, "Think Global - Act Local" is a mantra that has proven successful time and again. It should be part of every expats objective to encourage this thinking amongst his Indian colleagues. The right combination of expat and local will always be better than either on their own.”

Indian companies are making to attract people from other countries

Levermore, “The more progressive and professional companies who are building long

term sustainability for their stakeholders are making positive efforts to attract talent from abroad. As India Inc becomes more accepting of global practice and opportunity so these same companies and their stakeholders will reap the benefits.”

Indian companies affording US workers

After all, it was the cheap salary of Indian workers that made India the most attractive destination in outsourcing in the first place. Of course, living expense in India is much cheaper than USA and secondly Indian companies are not recruiting US workers in large numbers. So, they can easily afford to pay some Americans higher salary while they are still getting works done with their Indian workers at a cheap salary.

Levermore, “It depends on the size of the business opportunity and how much risk there is attached to not having foreign expertise. There are many countries besides the US where there is just as much expertise at a lower cost. The US is not the sole fountain of knowledge.”

Impact of reverse brain drain in the US and other parent countries

This new trend will make some people in USA unhappy as it is going to start a new wave of brain drain from the West to the East. It will be surprising if India will also start something similar to H1B visa for foreign skilled workers as sooner rather than later India is going to face shortage of highly skilled workers.

Levermore believes reverse brain drain will have 'Very little' effect. He further says, “Brain drain to other first world countries is more significant than drain to 3rd world. The move of skilled professionals from 3rd world to 1st world will continue unabated whilst mankind maintains a desire for better living standards.”

New global culture

With Indians going to work abroad and foreigners coming to work in India, we are heading towards a new global culture in general, and specifically, towards a new global working culture. Agreeing to this Levermore, says, “Very much so. The successful executive of the future is going to have to be a global corporate citizen with the requisite skills to perform in any culture, in any country. One of my personal objectives during my tenure in India is to ensure that my own executive team at HyperCITY are just such citizens.”