BHUBANESWAR, India, July 12 (Reuters) – The world’s major accounting firms are ramping up investments in new facilities in India from major cities as global demand for cheaper back office operations has grown and small towns are moving up the economic value chain.
For decades, large multinational corporations have rushed to India’s largest metropolises, especially Mumbai, Delhi and Bengaluru, to set up huge operations centers with millions, attracted by the abundant, cheap talent that pool, especially in IT.
Business services exports have become a critical part of India’s economy but the sector has been hit by a slowdown in global demand for software and challenges in large urban centers such as rising costs, high that attrition and slow progress in returning office workers afterwards. the pandemic.
A report by Ernst & Young in June said it is expected that multinationals will set up “global capability centers” for all types of industries in tier-2 cities such as Jaipur, Vadodara, Kochi, and Chandigarh. The number of such centers could expand to 2,400 by 2030 from 1,600, adding 2.6 million jobs and more than $100 billion to the economy.
That means more professional opportunities and possibly higher wages in places far from the many business centers that are connected around the world.
Diksha Mehta, 27, a mathematics graduate from the northern Indian city of Patiala is one of thousands of new employees, who recently joined Deloitte’s cyber security team – providing consultancy for a Australian bank and European retail clients.
“I was preparing for a career in academia but I was delighted when I got a job offer along with four classmates,” he said at Deloitte’s Gurugram office, outside New Delhi, where hundreds participated. in recent months.
Rising wages, a decline in accounting graduates in developed countries after the pandemic and amid visa restrictions have helped India emerge as a powerhouse for global business services such as tax, data analytics , cybersecurity and customer management.
India is one of the world’s leading exporters of services, doubling its share of world services trade to more than 4% from 2% in 2005, according to WTO estimates.
“Global giants are finding it easier and more competitive to shift work to smaller locations in India,” said Debasish Mishra, chief growth officer, Deloitte South Asia, noting the vast pool of English-speaking accounting, engineering and science graduates.
Deloitte, which has more than 100,000 workers in India, says it will hire 50,000 more staff over three years, and expand its footprint in new cities while KPMG plans to -hire more than 20,000 in the next three years.
PwC hired about 12,500 in the fiscal year that ended in March and expects to hire the same number this year, said Padmaja Alaganandan, the company’s chief people officer in India.
All that could bring relief for the labor market amid slow hiring in the manufacturing and IT sectors due to global growth concerns.
Prime Minister Narendra Modi has set a service export target of $400 billion for the current fiscal year, about 25% more than last year.
Sunil Talati, president of the Government-aided Services Export Promotion Council, said that total services exports may overtake goods exports in the next five years to $750 billion.
WAGE INCREASE
In Bhubaneswar, the capital of the eastern state of Odisha, Deloitte, PwC, and IBM have opened offices to serve Indian and global clients.
Swagatika Parmanik, 25, left her job as a software professional to join Deloitte as a consultant in Bhubaneswar, a city of about 1 million built around mining and farming.
The new position gives him more than a 50% salary increase and his flexible working arrangements allow him to stay at his parents’ house, 40km from the office.
“The salary increase helped me invest and buy medical insurance for my parents,” he said.
The new offices also encouraged educational institutions to start new courses and property developers to launch construction projects.
A report by the Knight Frank consultancy last week said that the demand for office space has increased significantly in smaller cities, driven by the expansion of global accounting and multinational operations, pushing rents up to 10%
Domestic accounting firms are also moving to smaller towns and raising wages.
Talati of the Services Export Promotion Council, whose audit firm employs nearly 400 auditors and consultants in Gujarat, said many companies are facing a shortage of certified accounting professionals.
“Retaining good employees is not an easy task as big companies double the salaries,” says Kshitij Patel of Manubhai & Shah LLP, an Ahmedabad-based accounting firm, which works for both domestic and foreign clients. in country clients.
“With the Big Four and other global companies coming to our cities, we are increasingly going to open offices in smaller cities.”
Reporting by Manoj Kumar; Graphics by Kripa Jayaram; Editing by Sam Holmes
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