Causes and Consequences of Brain Drain From India

23 of May, 2023

At Sesame, we’re all about helping businesses grow. That’s why we’re here to talk about one of the biggest challenges impacting companies right now: brain drain from India.

We hear words like “brain drain” thrown around a lot, but what does it really mean? And how can businesses make sure they don’t become a victim of this problem? In this article, we’ll dive into the causes and consequences of brain drain from India and provide tips for avoiding it.

The reality is that brain drain or talent flight is a real phenomenon in India—one that could have serious, long-term effects on any business operating in the country.

We don’t want to sound like fearmongers, but it’s worth considering the potential risks of recruiting in India without thinking through all the details first. Let’s get started.

The Talent Migration: Understanding India’s Brain Drain

Brain drain, or the migration of talented people from one region to another, is an ongoing challenge that India faces in the 21st century. As countries like the United States and Australia continue to offer attractive employment opportunities, many of India’s best and brightest citizens are tempted to pack up and go abroad.

To grasp the implications of this brain drain, it helps to understand its underlying causes. For starters, higher pay is a major factor. On average, wages in India are much lower than those in other countries, especially for highly skilled professionals. Indian employers simply don’t have the resources to pay competitive salaries for these talented individuals.

In addition, cultural differences come into play when it comes to brain drain. A lack of education and career opportunities at home can make relocation to another country seem like the only viable option— especially when those countries have more recognition and respect for hard-earned skillsets and qualifications.

And with an abundance of global job prospects available online, making that move is becoming easier than ever before.

Why Indian Talent Is Drawn Overseas

Brain drain from India is a major issue for business leaders and HR managers. But why is it happening? Why do Indian professionals feel the need to migrate overseas to pursue their careers?

It’s a combination of factors that combine to create an atmosphere of professional unrest. For starters, there’s the potential for higher wages abroad, along with better career prospects. In a global economy, Indian nationals find themselves in competition with international talent for top talent positions—something many employers are increasingly favoring over homegrown talent.

Next, there’s the feeling that India’s educational institutions—while still highly respected—aren’t keeping pace with those abroad. There are fewer opportunities for global networking and less access to cutting-edge technology. This makes India a less attractive professional destination than Europe or the US for many graduates.

Finally, there’s the weak job market within India itself: wages are often too low and job growth too slow to attract ambitious graduates looking to build their career in Asia’s largest economy. With few opportunities available at home, professionals have little incentive to stay put—and instead opt for more prosperous opportunities abroad.

The Impact of Brain Drain on India’s Economy

Brain drain can have a very real and tangible impact on the economy of India. That’s because the country is losing out on the innovation, expertise, and potential economic growth that could come from their best and brightest staying in India.

Dampening economic progress

Not only are many of the most talented individuals leaving India for higher-paying jobs abroad, but they’re taking their skills with them. This means that India is missing out on potential economic progress that would come from these experts working within India’s economy.

Lowering innovation

Having fewer people with certain skills also means there are fewer innovators inventing new products and businesses. Without this innovative spirit, it can be harder for India’s economy to grow at the same rate as those of other countries which are able to keep more of their top talent.

Exacerbating poverty levels

With lower innovation and fewer high-skilled workers, poverty rates in India can become exacerbated as other countries grow richer while India is left behind. The resulting lack of opportunity makes it even more tempting for young people to look for better prospects elsewhere—essentially creating a cycle wherein brain drain continues to negatively affect the economy.

How Multinational Companies Benefit From Hiring Indian Talent

You may be aware of the fact that India is losing talent to wealthier countries, but did you know that multinational companies are also benefiting from the brain drain? By recruiting highly skilled Indian workers, companies can benefit from not only their knowledge and expertise, but also their low wages.

Multinational companies see hiring Indian talent as a cost-effective strategy—India’s qualified workers are often more affordable than those in other countries. With relatively low wages comes greater profit margin. Plus, since many Indians are well versed in English, communication is rarely an issue.

The benefits of hiring Indian talent extend even beyond finances and communication:

• Indian workers have a reputation for reliability and hard work.
• Many Indian workers come from highly educated backgrounds in fields such as computer science and engineering, making them a valuable asset to corporations that want to stay ahead of the technological curve.
• Their knowledge of foreign markets can be an invaluable resource when expanding their business overseas.

So, while the brain drain continues to take away opportunities and resources from India, it is also benefiting other countries’ economies by providing multinationals with an attractive source of talent.

What Companies Can Do: Retaining Top Talent in India

One of the most important ways companies can help stem the Indian brain drain is by retaining the top talent they have already attracted. As an HR manager or business owner, this is something you can actively work towards. Here are a few tips for keeping your best employees in India:

Invest in Your Employees

Investing in your employees helps build trust and loyalty and shows that you value their work and contributions. This could include providing them with higher salaries, extra benefits, and training opportunities to help develop their skillsets so they can progress in their careers.

Create an Engaging Work Environment

Creating a workplace culture that is engaging and motivating will ensure your best employees stay with you for the long term. This could include having social activities, flexible working hours, and career development initiatives such as mentorship programs to help give them a sense of purpose.

Offer Career Growth Opportunities

By offering your top-performing employees career growth opportunities such as promotions or lateral movements within the company, you are showing that you value their skillset and want to help them grow professionally. This will give them more of an incentive to stay with you.

By investing time and effort into these strategies, companies can encourage their top talents to stay in India rather than exiting the country due to lack of opportunity or better quality of life abroad.

We hope that this article has been useful for your upcoming HR strategies. To keep up to date with everything related to human resources, stay with us at Sesame‘s blog.