Brain Drain or Talent Migration, simply put its an all-encompassing term that denotes the migration of smart & talented professionals from their domestic country or economy towards settling and working in foreign nations. This phenomenon chiefly attracts smart professionals & students who are given ample opportunities to study in foreign universities, serve foreign companies and essentially contribute to these foreign economies. The benefits they receive are widely varied, with the most common ones being better salaries, social environment, societal status, professional environment & learning etc. and so forth.
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It’s often quoted and re-quoted by many eminent business personalities as well as organizations, that the most valuable capital a business can possess is their Human Capital. Adequately qualified, reliable, loyal and an intelligent work-force is arguably the most important element a business needs in order to utilize their fiscal capital in the most profitable way. With the changing nature of Business environments and the advent of AI and Machine Learning, Human Capital Requirements have become increasingly specialized and niche-focused, with the demand for skilled and talented computer science professionals going through the roof.
Merriam-Webster’s Dictionary defines Brain Drain as “the departure of educated or professional people from one country, economic sector, or field for another usually for better pay or living conditions” Internationally renowned & widely used Financial Information Website Investopedia describes the phenomenon of Brain Drain as a “slang term indicating a significant emigration of educated or talented individuals. A brain drain can result from turmoil within a nation, the existence of favorable professional opportunities in other countries or from a desire to seek a higher standard of living. In addition to occurring geographically, brain drain may occur at the organizational or industrial levels when workers perceive better pay, benefits or upward mobility within another company or industry”
Brain Drain, Talent Migration and Flight of Human Capital as are its commonly known nicknames, displays itself on various levels. These levels are by no means mutually exclusive, as they complement each other level and essentially constitute as one part of a whole. In simplistic terms, these are the 3 of the most important and widely understood elements of Brain Drain:
Geographic Brain Drain is perhaps the most commonly known and widely understood facet of Talent Migration. It occurs when talented professionals leave their domestic country or regional economy in favor of another. This type of Brain Drain has the most wide-reaching impact, since the macro-economic effect it levies can visibly cause strains on the victim nations’ vision and ambition. Some key global reasons for Talent leaving their domestic nation are given as follows:
- Instability and Uncertainty in the Political Climate e.g. Venezuela
- Economic barriers and undue censorship enforced by the country, e.g. China
- Underdeveloped economy with a general lack of initiative towards recovery on part of the Government e.g. Zimbabwe
- A presence and increasing influence of corruption on almost all organs of Government
- Lack of Professional support, incentives or facilities made available by the Government
- Red-tapism and Bureaucracy in Government work environments
- Socio-economic factors on favorable settlements abroad
- Lack of properly developed financial systems, such as investment banks, stock markets, venture capital environment
Organizational Brain Drain
An Organizational Brain Drain is said to take place when there is a massive exodus of employees from a specific company/organization. Often touted as a corporate and HR nightmare, when employees begin to leave firms in large numbers and at an increasing frequency, it leads to this type of Talent Migration. This concept could potentially wreck the company, both economically and/or motivationally. Some reasons why large number of employees leave the firms are given as below:
• Instability within the company, both with leadership and/or financial issues – It’s always bad news for the investors when their company ends up in the news as embroiled in a scam or a well-publicized backlash regarding its top leadership. The former was more apparent in the case of English apparel maker Reebok’s India operation, where in 2012 the company came under intense scrutiny after its Parent Company accused its top management of scamming Rs 870 crore from the firm. Following the news, the company faced a huge surge of employees exits and voluntary retirement schemes being taken up.
Dissatisfaction between employees & leadership or between the respective colleagues themselves – If a feeling of intense discontent is felt by several employees, it may prompt them to leave the firm citing firm differences of opinion. Apple Inc.’s India operation, a premium smart-phone maker in 2017 had faced several of its top management and key personnel leaving the firm, with positions being vacated such as National Managers, Head of Sales planning & support etc. The reasons cited was simply put as employee dissatisfaction, presumably with the then new country manager Sanjay Kaul.
Increasing Competition in the Industry, coupled with below-average earnings and better employee prospects with competitors - A main reason why a company cannot retain top talent is when its falling behind its competitors, who on the other hand are surging forward and offer themselves as attractive venues for talent to migrate. In 2014, Infosys faced an unprecedented surge in employees leaving the firm due to senior management exits, low scope for career growth and more revenue share of the market to be occupied by competing rival firms, such as TCS. The attrition rate for employees at Infosys during that time was a record 18.7% of its almost 160,000 strong workforce back then. Organizational brain drain contributes to the larger geographic talent exodus when Foreign companies offer better opportunities, more pay and exciting challenges than their Indian Counterparts.
This concept could also be viewed as an extension of the Organizational brain drain, but here we focus on talent leaving specific industries and fields in search of better opportunities elsewhere. It’s common news in India that having the cherished IIT-IIM tag alongside their names will guarantee executives a long lasting and highly placed professional career. But since when did engineering students gravitate towards management? This is one of the most common and highly influential scenarios in India, where since businesses and corporations are becoming increasingly data-driven, they require managers who have demonstrated numerical and quantitative aptitude, thus entering our vast strove of job-seeking skilled engineers.
Prominent examples of such Industrial exodus are visible across the world, with the current world’s richest man Jeff Bezos of Amazon himself being an engineering graduate from Princeton University, USA. Several consulting firms such as Mckinsey, Bain & Boston Consulting Group boast about the sheer intellectual diversity of their talent, with business consultants who have backgrounds ranging from medical doctors, theoretical physicists, computer engineers, biologists, graduate students of law and politics, chemists etc. The smart talent who join respective fields such as healthcare etc. may for reasons such as monetary or comfort, shift to business or consulting-based enterprises. The loss of this human capital is borne by their respective fields, such as lack of good doctors in hospitals or researchers for bio-medicine etc.
India is one of the biggest victims of the migration of Talent, with its vast resources of smart human capital finding more comfortability with overseas companies and working abroad. In 2015, India has the largest diaspora in the world at appx. 16 million people (2015 UN Estimates) who are settled and/or working abroad. Over the recent years, India is being recognized as one of the fastest growing economies, prompting key multi-national firms to set up large branch offices & production factories here e.g. Apple, Google, Microsoft etc. While this step may help curb the flight of talent towards retaining them domestically, the allure of foreign settlement is still quite strong, with significant employees competing to occupy company vacancies abroad.
Words such as ‘Brain Drain’ and ‘Talent Migration’ became quite popular in India by observing the emigration of the various engineers, doctors and scientists, from various developing countries such as itself to more developed nations like USA, Australia, France, England etc. Now this phenomenon displays a conversed effect for a country in which people are getting migrated and brain-drain of a nation becomes brain-gain for that country. Almost all major developing countries including India, are suffering from brain drain and developed countries like USA, Germany are having brain gain from this phenomenon. Moreover, almost all the backward countries too are suffering from this problem. The situation in India is just more serious, owing to the sheer amount of skilled labor force who are leaving or at risk or leaving for better foreign opportunities.
An early set of estimated numbers from the United Nations Development Program Report in 2001, has revealed that India loses $2 billion a year because of the emigration of its computer experts & engineers to the United Nations. The number of Indian students who are going abroad from India also cost the country around $10 billion in foreign exchange outflow on an annual basis. The professions that are highly in demand are Engineers, Doctors, Scientists & Researchers, Computer Engineers, Data Scientists, Software Programmers, Finance Professionals etc.
In the year 1960, just about 12,000 Indian immigrants lived in the USA, representing less than 0.5 percentage of the 9.7 million ordinary immigrant population. Migration from India swelled between 1965 and 1990 as a sequence of legislative changes eliminated national starting place quotas, then went on to deliver temporary skilled employee programs with visas and created employment-primarily based everlasting visas. In 2016, Indians have been the top recipients of high-skilled H-1B temporary visas and were the second-biggest organization of international college students within the USA after China
Annually thousands of our best brains make frantic efforts to leave India. The demand for passports is increasing every year, even as more and significant employment opportunities are being created within the country. The steady and ever-increasing outflow of our nation’s talent, especially those who are educated at the cost of the tax payers money such as Central or State Government Scholarship recipients, Meritorious students of Government Aided Colleges, etc., are of concern to the Government & the Indian economy in general. A critical reason as to why the developed countries prosper and stay on the advanced development path, is because of the high intellectual migrants from the poor developing countries. This knowledge gap is ever-increasing, and the poor countries are essentially becoming poorer and the rich countries are emerging as the new centers for knowledge that gives them the power to ultimately dictate and the control the usage of the world’s resources. In a specific way, globalization has helped in retaining skilled people within the country, because a person can work for a foreign company sitting at home in India. But in the end, he is really contributing towards a foreign power & not for his own nation.
It’s no surprise when we hear news about Google’s Sundar Pichai and Microsoft’s Satya Nadella making huge waves in the field of Software and Global Commerce. The news is even more amplified in India, owing to their Indian origin. While it is indeed a matter of pride to the nation that a few of her children have achieved such acclaim, the harsh reality is that these men are now American citizens working hard to transform American companies that ultimately benefit the American Economy. The significant taxes they pay, the revolutionary software’s they often develop and the vast majority of the high paid workforce they hire, are indeed the property and beneficiaries of America. If Indian Engineers and Programmers have indeed been recruited to those companies abroad, they are now American citizens, paying taxes and contributing largely to the American economy. The US President Donald Trump’s Make in America Policy, however now seeks to dampen matters for the globally ambitious Indian Talent.
Following are the data given by the Indian Ministry of External Affairs on the number of Indian Students who are studying in some of the most attractive locations for foreign study. The countries given below are the ones with the greatest numbers of Indian Student concentration. The data was collected in the year 2017-18 by MEA, Government of India.
Brain Drain in India is caused by many stressors, a few key points are given as follows:
Unhealthy bureaucracy & red-tapism in Government work environments, such as Healthcare, Engineering, Trade & Commerce, Public Utilities etc. These factors hinder development of innovativeness and stifle creativity of aspiring citizens.
Socio-economic factors, being the belief that settling abroad would probably lead to a better lifestyle for both work and raising a family. This is the major reason why families tend to migrate abroad when given an opportunity for
In India, the Indian society has always placed a premium on the status of foreign Indian residents, with those individuals raising the status bar of the family and being sought after earnestly for marriage & business proposals owing their foreign residency. This factor is quite apparent in the composition and participation of major NRI businessmen in development projects across India.
Higher education, which has considerably evolved in India since Independence, is one of the major reasons why a lot of the future creative and talented workforce of the country leave India. Before independence education was limited and elitist but the current system is though more open with more than 30- 40% of enrolments from coming from the lower castes, and with women representing about 46% of the total number of students. The increase in students of higher education, though impressive, has raised some questions over the adequacy of studies, resources, institutional quality and standards. The Indian educational system places a huge premium on rote memorization as well as use outdated methods and textbooks. While the system is built for ensuring employability of the student, the future talent of India require a much premium, interactive and immersive educational experience.
Salaries & Employability – Arguably the most important incentive, work abroad almost always carry with it better pay and benefits. While the cost of living in nations abroad are a factor, the general idea about higher pay and a chance of foreign settlement is incentive enough for Indian workers/students to skip shore. India has a high number of skilled & semi-skilled labor force. The currently common complaint of low salaries and inefficient working conditions are usually the first motive that triggers the movement towards countries with better living standards and facilities. There is huge difference in terms of salary that the skilled, semi-skilled and unskilled labor force attains. To display the concept, Skilled workers work using their desirable skills learnt through considerable time spent on training, but the working conditions in their homeland don't fulfill their wishes. Therefore, those workers prefer to move another country in order to attain better living conditions with high salaries that are more in line with the demand for their skills. This outflow of employees is one of the most visible facets of Brain Drain in India
• Corruption, now while not a major factor in the overall Brain Drain scenario, Corruption of Government officials and Government bodies are quite rampant across India. This coupled with their relative inefficiency makes the work environment in India undesirable workplaces to invest time, manpower and resources in. These reasons drive away home-grown talent as well as hinder the path of foreign investment. While over the recent years, the entrepreneurial climate and support in India has definitely increased with PM Modi’s Make in India Initiative, we are still a long way from getting the title of ‘Corrupt’ largely erased from our mental vernacular when thinking about India
• Supportive Policies for International Migration due to the Increasing economic interdependence among nations, coupled with growing demand for skilled labor in the knowledge & data-driven ecosystem as well as demographic trends are all strengthening the position of India as a major supplier of talented, young, educated and qualified manpower for regions of the world such as the European Union and the Americas. Owing to its demographic profile and its English-speaking population, India, with its large reserves of highly-skilled workers, has emerged as one of the most prominent country to fill the supply gaps in the skilled and young labor-deficient economies of the developed world. Especially in the European countries in order to facilitate labor mobility, some EU countries signed labor-mobility partnerships with India. According to the Ministry of External Affairs, this kind of agreements was signed with Denmark, with negotiations ongoing with other European countries such as Poland, the Czech Republic, Norway, Switzerland and Hungary, Sweden and France etc.
This situation of Brain Drain is a matter of urgent importance, as failure to acknowledge it may cause us to face permanent consequences of slower than possible growth. With an economical growth rate of 7.4% appx., the Indian economy is one of the fastest growing economies in the whole world. This growth came across due to many reasons, key among them being new policies by the government to support trade, an immensely huge smart-phone enabled population that made possible many apps such as Uber, Airbnb to function in India. The past few years also saw a significant number of Indian startups taking the reins as unicorn startup companies (startups with a valuation of $1 billion +) such as Ola, Oyo Rooms, Swiggy, PolicyBazaar, Paytm, Flipkart etc. The economic growth is also assisted by an increase in spending by the Indian population on online platforms, which coupled with favorable FDI policies have enabled Major foreign firms such as Walmart, Disney, SoftBank to acquire properties and stakes in many Indian undertakings.