Comments on: Outsourcing Staff Shortage? http://stockmarketbeat.com/blog1/2007/01/12/outsourcing-staff-shortage/ Our beat: The stock market. Our job: Beat it. Mon, 01 Dec 2008 23:02:43 +0000 http://wordpress.org/?v=2.2.1 By: Trent http://stockmarketbeat.com/blog1/2007/01/12/outsourcing-staff-shortage/#comment-18310 Trent Tue, 06 Mar 2007 22:41:15 +0000 http://stockmarketbeat.com/blog1/2007/01/12/outsourcing-staff-shortage/#comment-18310 The short answer is probably "volume." The 58 engineers you mention would only replace one day's worth of hiring for Cognizant, let alone the Indian outsourcers as a group. The short answer is probably “volume.” The 58 engineers you mention would only replace one day’s worth of hiring for Cognizant, let alone the Indian outsourcers as a group.

]]> By: Patrick Howell http://stockmarketbeat.com/blog1/2007/01/12/outsourcing-staff-shortage/#comment-18303 Patrick Howell Tue, 06 Mar 2007 22:15:37 +0000 http://stockmarketbeat.com/blog1/2007/01/12/outsourcing-staff-shortage/#comment-18303 Why not use Poland at an outsource center? Many offshore software development failures are due to instability in the workforce in geographies such as India and China. The demand is much greater than the supply, with engineers moving from job to job in time periods measured in months. Competition for engineers and programmers with specialized expertise is fierce, and turnover is high, with some firms in India reporting turnover as high as 40 percent annually. In India they are providing "shadow engineers" --- engineers who are not billable but are tracking a project to replace the next engineer who leaves. In many case the "shadow engineers" are fully 20% of the engineering headcount on a project. This situation almost guarantees project failure. By contrast, Polish engineers value job stability and as a result provide a stable work force. For example, one group in Katowice Poland has achieved zero attrition amongst their 58 engineers in three years. This is common in Poland but yet unheard of in other countries. Why not use Poland at an outsource center?

Many offshore software development failures are due to instability in the workforce in geographies such as India and China. The demand is much greater than the supply, with engineers moving from job to job in time periods measured in months. Competition for engineers and programmers with specialized expertise is fierce, and turnover is high, with some firms in India reporting turnover as high as 40 percent annually. In India they are providing “shadow engineers” — engineers who are not billable but are tracking a project to replace the next engineer who leaves. In many case the “shadow engineers” are fully 20% of the engineering headcount on a project.

This situation almost guarantees project failure.

By contrast, Polish engineers value job stability and as a result provide a stable work force. For example, one group in Katowice Poland has achieved zero attrition amongst their 58 engineers in three years. This is common in Poland but yet unheard of in other countries.

]]> By: CTSH: Cognizant Likely to Beat Newly-raised Guidance - Stock Market Beat - Our beat is the stock market. Our job is to beat it. http://stockmarketbeat.com/blog1/2007/01/12/outsourcing-staff-shortage/#comment-13139 CTSH: Cognizant Likely to Beat Newly-raised Guidance - Stock Market Beat - Our beat is the stock market. Our job is to beat it. Mon, 05 Feb 2007 14:33:58 +0000 http://stockmarketbeat.com/blog1/2007/01/12/outsourcing-staff-shortage/#comment-13139 [...] The company also appears to have done a good job managing employee turnover (though that remains our biggest concern.) According to the release, the company added a net total of almost 4,500 employees in the fourth quarter and more than 14,500 employees in 2006 overall, bringing their total employee count to more than 40,000. That means that during 2006 the employee count grew by 14,500/(40,000-14,500)=57%. This is important because Cognizant is a consulting firm, and increasing headcount is the primary way such firms can increase future revenues. [...] […] The company also appears to have done a good job managing employee turnover (though that remains our biggest concern.) According to the release, the company added a net total of almost 4,500 employees in the fourth quarter and more than 14,500 employees in 2006 overall, bringing their total employee count to more than 40,000. That means that during 2006 the employee count grew by 14,500/(40,000-14,500)=57%. This is important because Cognizant is a consulting firm, and increasing headcount is the primary way such firms can increase future revenues. […]

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