One of my first stops in Bangalore was IBM, which has nearly 50,000 employees in India now and his growing so fast that it might soon have the largest employment level of any tech company in India. TCS has about 80,000, so IBM still has a ways to go, but, if it doesn't overtake TCS it won't be for lack of effort. In addition to stationing an army of people in Bangalore, IBM now has a bunch of people in Hyderabad, Delhi, Chennai, Pune, Kolkata, and Gurgaon. This way, it casts a wide net for talent and avoids the worst of the recruiting wars in Bangalore.

It's in the middle of a major HR push aimed at lowering costs and retaining top talent. On the cost side, it's moving from a 60/40 mix of hiring experienced people versus fresh graduates to something more like 50/50. On the retention side, it's giving Indian employees more opportunities to have overseas assignments, working with employees practically from day one to map career paths and line up the appropriate on-line and classroom skills training, and improving the abilities of employees to move around within the Indian business units. The HR bosses have even appointed a staff of a dozen or so "royal ambassadors" whose job it is to keep track of new hires and make sure they're assimilating well.

Person after person at IBM told me today that India's woeful infrastructure isn't their big problem; it's recruiting, training, and retaining employees. "India is the Wild West right now," says Harish Grama, vice president in charge of IBM's Software Lab in Bangalore. "There are young kids who are looking for a 20% raise a couple of years after they come on board. They're taking the short view, because they have so much opportunity. I can pay very competitively and more than most, but I'm faced with new multinationals coming in and cherry picking good people at two times what I pay."

The IBM solution is to try to convince people that a career is more important than just money. It seems to be working fairly well for Grama. His attrition rate is below 10% on an annual basis, substantially lower than the 15% industry average for software programmers in India.

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