How strong rupee is going to impact epmloyment opportunities in India?

foreveronline

foreveronline

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Uptill now this issue has really being talked about and is seriously hampered the jobs in the BPO's and KPO's sector....infact latest being talked about is that it has started hampering the manufacturing sector also...


So friends i need your comments on this......

Himanshu
 
This is a good topic.

Well friend,Impact of the rupee in India in services and manufacturing will be felt across the country as they are more export-oriented.

Indian IT majors are very badly hit by the rising rupee.For every 1% increase in the rupee, IT balance sheet will be affected by 40-50 basis points.In 2007 alone the rupee has appreciated by 12%.So think about the impact on the IT companies revenues.Employees will be directly affected by the % hike they receive every year.Last year the avg hike was ~12%.This year it might be less than that.IT companies are trying to reduce the onsite-offshore ratio to reduce the expenditure.More importantly they are trying to increase the fresher's strength to keep pace with the rising rupee.At last resort,IT companies will approach the US clients to revise the billing rate.

Even in manufacturing sector there are job cuts happening due to the currency appreciation.Govt is facing the heat from the Exports council to cut the tax rate which mite give the exporters some respite in this currency crunch.

More importantly the companies are starting to focus on revenue/employee and they are targetting to increase it so that they can reduce the employee strength with no impact on the business.

-Deepak.
 
the rise in rupee is affecting the bottom line of the companies ...but it is difficult to say weather it will affect the employment situation in the industry .actually the no of employee depends upon the no of clients and the size of the project of the companies.and their is no report that no of clients have decreased due to rise in the rupee til yet..so now it cant b said for sure that rising rupee will effect the employment status in industry
 
deepakraam said:
This is a good topic.

Well friend,Impact of the rupee in India in services and manufacturing will be felt across the country as they are more export-oriented.

Indian IT majors are very badly hit by the rising rupee.For every 1% increase in the rupee, IT balance sheet will be affected by 40-50 basis points.In 2007 alone the rupee has appreciated by 12%.So think about the impact on the IT companies revenues.Employees will be directly affected by the % hike they receive every year.Last year the avg hike was ~12%.This year it might be less than that.IT companies are trying to reduce the onsite-offshore ratio to reduce the expenditure.More importantly they are trying to increase the fresher's strength to keep pace with the rising rupee.At last resort,IT companies will approach the US clients to revise the billing rate.

Even in manufacturing sector there are job cuts happening due to the currency appreciation.Govt is facing the heat from the Exports council to cut the tax rate which mite give the exporters some respite in this currency crunch.

More importantly the companies are starting to focus on revenue/employee and they are targetting to increase it so that they can reduce the employee strength with no impact on the business.

-Deepak.
Click to expand...

Thank you very much for replying to my question Sir.
 
The rising value of rupee or rather the over all depreciation of dollar has caused major harm to Indian IT sector.
Its primarily because Indian IT sector is majorly into Network Maintenance and Production support work which has the nature of outsourced work, very similar to Call centers...
All the designing and execution work is still done by foreign firms, all indian IT companies do, is provide support after projects go live. Though the clients are ready to shell out millions of dollars for designing and research work, they are not willing to cough up more money for prod support and hence the work is outsourced in india mainly because its cheap and affordable after a large sum expenditure on development.

If rupee strengthens any further, this prod support work will not be as affordable to this companies as it was before the depreciation of dollar. which will result in lots of pink slips for IT employees like me.

just now, our working billable hours have gone up from 40 hours a week to 45 hours a week to compensate for the decrease in dollar prise. if the depreciation continues, i wonder if Indian firms can withstand it..........
 
its already making a lot of difference...KPOs, BPOs, RPOs, and several IT companies are slowing down on recruitment. To maintain the profit now existing employee have to work even more efficiently on there own...
 
well no doubt it is affecting BPO's,Kpo's and all other forms of IT n Export oriented units.. But the bottomline is nowa days everyone is prepared for the worst so they already must have arbitraged their positions... It will have some impact nut i dont think so it is going to be too significant..moreover as my freind mentioned there can be some negotiations in terms of payment...
 
a big chunk of money or economty boost is from bpo or foreing redemption...it wil be effected ..imports exports bpo credit will be effected
 
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