What's the Secret of your Success?

An excellant summation by Micheal Hyatt. We all have heard of (and experienced) what a positive attitude can help achieve, however, in today's times I would add another trait - curiosity, as I believe that in a Knowledge economy unless you have an inquisitive nature and are constantly seeking answers or trying to look into the future you would lag behind. This is what Mr Hyatt has to say on what he considers is the single most important trait -responsiveness.

As a CEO, I get asked this a lot. And, I'm always a little embarrassed by it. For the most part, I get the question from people who are in their twenties. They want to know “the secret path to the top.”

This past weekend, I received an email from one of my readers. He started, “I have an MBA, but I must have missed the course on Fast-Tracking My Career. If you had to boil it down to one thing, Mr. Hyatt, what would you recommend to a young, aspiring person such as myself?”

I'm not sure I could boil it down to one thing. Life isn’t usually that simple. But if I really, really had to boil it down to one thing, I would say this: responsiveness.

So many people I meet are unresponsive. They don’t return their phone calls promptly. They don’t answer their emails quickly. They don’t complete their assignments on time. They promise to do something and never follow through. They have to be reminded, prodded, and nagged. This behavior creates work for everyone else and eats into their own productivity. Sadly, they seem oblivious to it.

When I was a kid, we used to play “Tag.” The objective was simple: keep from becoming “It.” If someone tagged you (touched you), you became “it” until you tagged someone else. Whoever was “it” when the game ended, lost.

Business is very similar. People “tag” us in countless ways every day. They place calls. They send emails. They mention something to us in a meeting. Suddenly, we are “it.” And, just like the game, if you stay “it” too long, you lose. The only winning strategy is to respond quickly and make someone else “it.”

Reality is that we live in an “instant world.” People want instant results. They don’t want to wait. And if they have to wait on you, their frustration and resentment grows. They begin to see you as an obstacle to getting their work done. If that happens, it will begin to impact your reputation. Pretty soon people start saying, “I can never get a timely response from him,” or “When I send her an email, I feel like it goes into a black hole,” or worse, your colleagues just roll their eyes and sigh at the mention of your name.

Yet, these are the very people who will push you up or pull you down. You cannot succeed without the support of your peers and subordinates. (Go back and re-read that sentence again.)

As I was making my way to the top, my former boss, Sam Moore, used to ask everyone I worked with, “What’s it like to work with Mike?” “How’s he really doing?” “Do you think he could take on more responsibility?” In responding to him, all they had was their experience with me. If I hadn’t been responsive to them, how do you think they would have responded to his questions? “More responsibility? Are you kidding me? He can’t handle what he has now!” It wouldn’t take too many candid responses like that to tank my career.

And yet this happens to people all the time. I can’t tell you how many meetings I have sat in where people are complaining about someone else’s work habits. “He always waits until the last minute.” “She never plans ahead.” “I can never get him to respond to my emails.” You may think that the people who are making these comments are too far down the food chain to matter. I can assure you they aren’t. They have a way of bubbling to the top where the decisions about your career are made.

The truth is, you are building your reputation—your brand—one response at a time. People are shaping their view of you by how you respond to them. If you are slow, they assume you are incompetent and over your head. If you respond quickly, they assume you are competent and on top of your work. Their perception, whether you realize it or not, will determine how fast your career advances and how high you go. You can’t afford to be unresponsive. It is a career-killer.

My basic rule is this: respond immediately unless there is a good reason to wait. Obviously, this isn’t always possible, especially since I spend so much time in meetings. Nevertheless, I rarely let messages sit longer than a day. Twenty-four hours is the outside edge. If you can’t respond now, then at least acknowledge that you have received the message: “I received your message. I don’t have time to give it the attention it deserves right now, but you can expect to hear from me before the end of the day tomorrow.”

The great thing about being responsive is that it will quickly differentiate you from your peers. People love doing business with responsive people. Nothing will advance your career faster than this.

Warren Buffet on Value

 

Price is what you Pay, Value is what you Get

                                                                                 Warren Buffet

Service Tax on providing Recruitment Services to Overseas Companies

I have been asked by some TPR associates as to what is the
correct position wrt Service Tax on Provision of Recruitment Services to companies abroad. 

In this connection I would like to, firstly, point out that Service Tax is a destination based consumption tax and it would, logically, be leviable only on services provided within the country and not be applicable on export of services.

However, as I had mentioned in one of my earlier posts, wef March 15, 2005 the Govt has introduced the Export of Services Rules, 2005 which have, subsequently, been amended from time to time. Hence, currently, the above query needs to be answered in the context of the said Rules and the amendments notified thereto.

As per Rule 3 all the taxable services have been divided into 3 parts, each part being represented by a sub-rule. Each part has a different set of criteria so as to treat the service provided therein as an “Export of Service” and hence become eligible for being treated as Exempt.

Suffice is to say that sub-rules (1) & (2) are not relevant to our query as they apply to

(1) Property based services i:e services which are related to immovable property and cover service providers such as Architects, Interior Designers, Real Estate Agents, Construction Services, Site Preparation Services, etc

(2) Performance based Services, i:e services which are performed by service providers either fully or partly outside India, the service is used in a business or for any other purpose outside India and payments are received by the service provider in convertible foreign exchange. Service providers covered under the said sub-rule are Stock Brokers, Practicing CA/CS/CWA, Security Agencies, Tour Operators, Event Managers, Travel Agents etc.

Manpower Recruitment or Supply Agency Services, along with many other services, are covered under the residual services category of sub-rule (3) of Rule 3 which is primarily for recipient based services and these services will be treated as Export of Services, if such services are used in or in relation to commerce or industry and the recipient is located outside India.

However, in case the recipient has any commercial or industrial establishment or office relating thereto in India, such services shall be treated as Export of Services only if the order for such service is made from outside India, the services are delivered outside India and used in the business of the recipient outside India as well as the payments are received, by the service provider, in convertible foreign exchange.

In case, the service provided is not used in or in relation to commerce and industry, the service provided will be treated as Export of Service only when the recipient of such service is located outside India at the time when such service is received. This would generally not be applicable to recruiters as their service would mostly be used in the business of the recipient outside India.

From the above the following situations emerge:

a) Where the Recruiter, in India, provides services to a Recipient (client) located outside India which does not have any commercial or industrial establishment or office relating thereto in India and such services are used in or in relation to commerce or industry by the recipient – then the said service is exempt and can be provided without payment of Service Tax.

b) Where the Recruiter, in India, provides services to a Recipient (client) located outside India which has an office or establishment in India but the order for commissioning such service is from outside India and such services are delivered outside India and also used in or in relation to commerce or industry by the recipient as well as the payments are received, by the service provider, in convertible foreign exchange – then the said service is exempt and can be provided without payment of Service Tax.

c) Where the Recruiter, in India, provides services to a Recipient (client) located outside India but such services are not used in or in relation to commerce or industry by the recipient – then the said service is exempt and can be provided without payment of Service Tax only in cases where the recipient is located outside India at the time when the service is received by it as well as the payments are received, by the service provider, in convertible foreign exchange.

In my opinion what is of great significance is that in the requirement of para (a) above there is no mention of monies being received in convertible foreign exchange and in para (b) there is an additional requirement of having to prove that the service was ‘delivered’ outside India.

As far as the para (a) requirement is concerned I am of the opinion that all Recruiters should play it safe and only treat those invoices as exempt from Service Tax where, even though they meet all the other conditions, the monies are actually going to be received in convertible foreign exchange.

As regards the requirement of proving ‘delivered’ under para (b) above, I guess, in case all the other requirements are met, then the Department needs to take a practical view in the matter and treat all such cases as exempt from Service Tax.

I look forward to all comments, queries and inputs.

Are global layoffs likely to benefit techies in India

As I have pointed out in my earlier post, Offshoring is good for America, and even Jack Welch has stated that Outsourcing Is Forever - Jack & Suzy Welch, thus this story, in the Econimic Times, which has a slightly different take, is worth a look. In the end, I Think,  it will come down to how effectively the Indian side handles the PR wrt this issue.

Global pink slips in the tech industry may end up benefiting India. As big-wigs like Intel, Sony, CA, IBM and Sun Microsystems announce the return of retrenchment, Indian HR honchos foresee a spurt in demand for low-cost, high-skilled destinations like India in the near future.
The chip-maker-in-distress, Intel, on Wednesday announced that it will reduce its global work-force by 10,500 by mid-07. But this is unlikely to have a huge impact on its India operations, which incidentally, is its largest development centre outside the US. The company refused to put any India numbers on the table, but indications are that investment commitments of over a billion dollars will stay, so the local layoffs may not be high. However, indications are that there could be a cap on hiring.

Indeed, with cost-cutting a major priority, Intel may outsource more to India, say market sources. “India could stand to gain from these global layoffs. Due to talent availability at cheaper costs in the Asia Pacific, Central America and East European regions, business processes are being restructured and shifted to these locations," says Pradeep Udhas, KPMG executive director and CEO, KPMG Resource Centre.

For instance, IBM, which announced axing of 13,000 jobs in Europe and the US, followed it up with plans to treble its investments in India over the next three years by pumping in $6bn towards its operations here.

Rakesh Malik, practice leader-global sourcing (India), Hewitt Associates, said: “With global competition fuelling restructuring efforts to attain greater efficiencies at low costs, firms are exploring different geographies outside the US.” A talent crunch in some markets further triggers the search for newer alternatives, he added.

Terming layoffs announced by Intel as a ‘correction’, Nasscom president Kiran Karnik said: “The industry goes through a business cycle. It is a temporary phase where the company is attempting to strike a balance between manpower and demand. As the business moves towards an upcycle, I am sure they will add people.”

Experts, however, point out that India Inc, through industry associations like Nasscom, needs to intensify efforts to manage its PR globally in order to deal effectively with the sensitive issue of job losses in countries such as the US.

AESC Member Search Firms Form Alliance

One has been talking (and writing) about the evolution of new
business models for the past year or so primarily because of my
exposure to similar trends in the CA profession, where due to the
exponential growth seen by clients it is increasingly becoming
untenable for smaller boutique firms to effectively service their
client's needs (sometimes on account of their lack of geographical
reach/size and at times due to paucity of management/domain
bandwidth). In view of the same, the said professional service firms are adopting new and innovative strategies to overcome their size/expertise limitation and one of the models being increasingly adopted is the formation of an "Alliance of Firms" which operates under one brand globally but firm retains its independent identity too.

I had shared my experience in this regard with some TPRs and some of them had shown preliminary interest in the said model. In the meantime I have come across this "press release" and I would solicit the views and interest of all the members on whether they too feel there is potential in creating such an alliance and what could be the key stumbling blocks/ road blocks in actually creating an alliance of this nature. I am sure others would have had some experiences (or would have heard some war stories) in this regard and it would benefit everybody in case they shared these with the other readers.

As Peter F Drucker pointed out:

"Business once grew by one of two ways: grass roots up, or by
acquisition. Today businesses grow through alliances - all kinds of
dangerous alliance, joint ventures, and customer partnering, which by the way, very few people understand."

Although Mr Drucker is no longer with us in this world, his words of wisdom continue to provide deep insight into this continuously
evolving business paradigm.

Looking forward to all inputs.

NASSCOM creating a list of NO SHOW candidates

We in our association have been implementing this for sometime now, however, I guess NASSCOM too has now woken up to this menace and is planning to create a list of such candidates who do not show up after accepting an offer. This list can be accessed by all major companies to check for any such behaviour by candidates in the past. Such candidates may also be blacklisted, making it difficult for them to work for reputed companies in the future.

While a candidate is perfectly within his/her rights to accept the offer which he feels is the best suited to his career path, however, it is very important that once they have made up their minds they show some basic courtesy by immediately informing all the companies from whom they have collected an offer letter about their decision. This would help these companies in working out alternatives in time and their work schedule and commitments to customers would not go haywire.

Why people leave an organisation

Here is a message sent to me by someone which I would like to share. How true!

Every company faces the problem of people leaving the company for better pay or profile.

Early this year, Arun, a senior software designer, got an offer from a prestigious international firm to work in its India operations developing specialized software. He was thrilled by the offer.
He had heard a lot about the CEO. The salary was great. The company had all the right systems in place employee-friendly human resources (HR) policies, a spanking new office, and the very best technology, even a canteen that served superb food.
Twice Arun was sent abroad for training. "My learning curve is the
sharpest it's ever been," he said soon after he joined.

Last week, less than eight months after he joined, Arun walked out of the job. Why did this talented employee leave ?
Arun quit for the same reason that drives many good people away.

The answer lies in one of the largest studies undertaken by the Gallup Organization. The study surveyed over a million employees and 80,000 managers and was published in a book called "First Break All The Rules".

It came up with this surprising finding:
If you're losing good people, look to their immediate boss. Immediate boss is the reason people stay and thrive in an organization. And he's the reason why people leave. When people leave they take knowledge, experience and contacts with them, straight to the competition.

"People leave managers not companies," write the authors Marcus Buckingham and Curt Coffman.

Mostly manager drives people away?

HR experts say that of all the abuses, employees find humiliation the most intolerable. The first time, an employee may not leave, but a thought has been planted. The second time, that thought gets strengthened. The third time, he looks for another job.
When people cannot retort openly in anger, they do so by passive
aggression. By digging their heels in and slowing down. By doing only what they are told to do and no more. By omitting to give the boss crucial information. Dev says: "If you work for a jerk, you basically want to get him into trouble. You don't have your heart and soul in the job."

Different managers can stress out employees in different ways - by being too controlling, too suspicious, too pushy, too critical, but they forget that workers are not fixed assets, they are free agents. When this goes on too long, an employee will quit - often over a trivial issue.

Jack Welch of GE once said.

A company's value lies "between the ears of its employees".

Dangerous Alliances - Peter F Drucker

"Business once grew by one of two ways: grass roots up, or by acquisition. Today businesses grow through alliances - all kinds of dangerous alliance, joint ventures, and customer partnering, which by the way, very few people understand."

Although Mr Drucker is no longer with us in this world, his words of wisdom continue to provide deep insight into this continuously evolving business paradigm. 

Windows Live Writer

Today, for once, after years, I used a MS product  within days of its launch and I must admit I am pleasantly stumped! Although I have not used it extensively but the simple uploads that I did today worked like a charm. Uploading the same post onto different blog hosts was a cinch. Great stuff - till now.

Economy's racing but talent is still hard to come by

It’s been 10 weeks now and Marut Sikka is still on the lookout. The Delhi-based food expert is looking for a chef for his client since June. “They are just not available,” he says. With the changing lifestyle and rising disposable income, the food and restaurant business in India is growing rapidly. The organised restaurant business, pegged at Rs 21,000 crore has been growing at 25-30%in the recent past. Big restaurants in Delhi alone, Mr Sikka estimates, would need up to 35,000 chefs.
But where will they come from? India does not have a single training institute for chefs. Most chefs who are good were trained on the job, and most have been picked up by international outlets. “Indian food and chefs are in demand,” he says. It’s the most serious issue for the industry, adds Mr Sikka.
This isn’t just about chefs. Add masseurs, hair stylists, event managers, interior decorators, florists and many more services professionals to the list. Garment exporters are looking for merchandisers. The auto industry is looking for design engineers. Infrastructure companies are looking for urban and town planners. A rapidly growing economy is creating plenty of jobs — but mostly in the services sector. But there aren’t enough trained professionals to take those jobs. “Employment and educational infrastructure — both haven’t kept pace with the economy,” says B Santhanam, CEO of Saint Gobain and chairman of CII HR committee. The scramble for talent is making headlines when 45m Indians are unemployed and many more underemployed as agricultural labour.
Clearly, an agrarian economy has leapfrogged to turn into a services-led economic engine — today, services sector provides over 60% to India’s GDP while agriculture and industry provides around 19 and 10% respectively. But the employment patterns are just the reverse. Over 56%of India’s workforce today is employed — often underemployed — by the agricultural sector. “It’s no rocket science — going forward industry and services will create jobs in future. To make that work, agrarian workers will have to migrate,” he says. Through training and skill development China has successfully managed to migrate 9m workers from agriculture to industry.
If India does not wake up its a time bomb ticking. The Teamlease Labour report estimates that if things continue the way they are, India will have anywhere between 8.4 crore and 21 crore (see table) unemployed workers in the country, depending on the rate of employment growth. Of course, literacy levels will matter. Given the trend growth in the 1990s, India’s working age population will have 233m uneducated and 157m primary school pass people. Hopefully the Left-backed government will go on a literacy overdrive to tackle that. But this isn’t just about literacy levels.

India's educational infrastructure has to be completely hauled up. Today professional orientation is very low — Of the total college enrolments, 84% in ‘04-05 is in arts and commerce or sciences. Only 16%of students were enrolled in professionals courses. Even in the small base of 16%, there is an issue of employability — barely 20% can be directly hired by the industry. “Training infrastructure set up by corporates will play a critical role,” says Vineet Kaul, director, HR Philips Electronics. Capacity building at colleges will be important. But they will also need to impart softer skills, introduce new courses and attune syllabus closer to the industry needs.
Not just at the high end, India Inc will need many more at the low-end in jobs like plumbing, brick laying, electrician, tailoring. "ITIs today offers training in only 40-45 trades, overlooking many other skills that the industry may need today," says Shailendra Sharma, former advisor, employment and training, Planning Commission. ITIs will have to evolve — already in five-six states, private sector is chipping in streamlining operations and training programs.
But migrating over 200m agrarian workers to other sectors of the economy will hold the key. “Private sector is willing to partner training in most areas but here the government's role will be critical,” says Mr Santhanam. CII is already piloting a project for the Tamil Nadu government where Rs 550 crore is being invested in grassroot training. At a national level, it expects Rs 5,000 crore annually will suffice to train 50 lakh agrarian workers. “It may sound big — but this investment will have a multiplier effect for the nation and the economy,” he said.

Source: The Economic Times

Pitfalls ahead for the booming KPO sector

Supply side issues may yet trip up the growth story at the high end of the offshoring business.

The conventional wisdom so far has been that knowledge process outsourcing (KPO) is going to be India’s (and indeed, the globe’s) fastest growing sector over the next decade, growing at more than 40 per cent a year.

Upbeat estimates envision the global KPO business soaring from the current $2 billion to $16-17 billion by 2010, with India’s share of this newest, hottest sunrise sector at more than two-thirds, or $12 billion, and employing 250,000 people.

However, while a new White Paper by employment services firm Kelly Services is gung-ho on KPO, a study by RocSearch, a UK-based research services firm, warns that the size of the Indian KPO market in 2010 will be just a little more than $5 billion, and that it will provide employment to only 100,000 people.

Yet another employment services firm— Manpower Services— however offers a way out of current and potential problems through private-public partnerships.

The White Paper by Kelly Services, titled Knowledge Process Outsourcing (KPO)— An Emerging Opportunity, cites the usual reasons why India is considered “by far the most attractive KPO destination”: its competitive salaries (less than 40% of US salaries); proficiency in English (with more than 70 million people speaking it); and its large and competent pool of professionals (nearly 3 million new graduates every year).

A large number of Indian and foreign players have made a successful entry into the KPO domain in India. They include Evalue Serve, Genpact, JP Morgan, Morgan Stanley, SmartAnalayst, McKinsey, Value Notes, Netscribes, Smart Cube, WNS Global, Quest, HSBC, Office Tiger, Citigroup, Reuters, Fidelity, Tech Books, ITC Client Logic and Copal Partners.

“It is estimated that most of them will grow the India KPO business manifold in the coming years, while simultaneously a host of new players will enter the KPO segment in India,” says the Kelly study.

However, RocSearch warns that a severe talent crunch may limit India’s achievements in the KPO domain, forcing a scaling down of market-size expectations from $12 billion to $5 billion, and employment in the sector from 250,000 to 100,000. It adds that analysts may have overestimated the supply of skilled workers in the country.

There is currently an annual addition of more than three million graduates and professional degree and diploma holders to the existing of 100 million. India has the world’s second largest reservoir of engineers and scientists, and the second largest pool of IT manpower. More than six times as many Indians as Chinese go to universities. However, there is the issue of poor employability and competing demands from other sections of domestic industry.

RocSearch observes that, partly as a result of outdated curricula at many professional colleges, only a fraction of the qualified labour force can be considered suitable for employment in reputed companies. Of the three million educated workers added to the labour pool in 2005, it points out, only 500,000 “could be considered employable in a world-class company.”

RocSearch says this would bring down the number of India’s KPO employees in 2010 from the currently projected 250,000 to 100,000. At an average revenue per person of $55,000 in 2010, it projects that the sector will be worth a little over $5 billion by then.

Manpower Services points to the way forward in a White Paper of its own, titled Confronting the Coming Talent Crunch: What’s Next? The paper observes that as the talent crunch intensifies across countries, governments that are finding it difficult to recruit the right talent have started looking to employment services providers for ways to recruit and train individuals for positions that are hard to fill.

Indeed, Manpower has worked with government agencies in Australia, the Netherlands, China, the UK, the US and Canada to address supply-side issues on the labour front.

On the BPO front, private-public partnerships featuring NASSCOM, Dell, Microsoft, the Indian Institutes of Information Technology, and the governments of Andhra Pradesh and Chandigarh, have already taken off.

The NASSCOM initiative is called IT Workforce Development, in which some 20 companies are involved. This covers faculty development, mentoring and internship programmes, with professors work closely with companies.

Source: Business Standard

Court passes restraining order on Poaching

The High Court of Delhi has passed a restraining order restraining Wipro Biomed's longtime partner Beckman Coulter from luring away its employees. Beckman Coulter is said to be preparing the ground for an independent foray into the Indian market.

With an acute shortage of talent being faced in sectors like Life Sciences, Aviation, IT and BPO this would establish some kind of a benchmark in the Indian scenario where where there is still no clarity on the validity of non- compete agreements.

In industries like Aviation considerable investments are made in training the Pilots and in case such a non-compete clause is missing then as per Capt Gopinath, Air Deccan Managing Director, "one fine day you see key people not having reported for work, and there you have a grounded aircraft. We spend considerable amount of money on training our crew."

Source: Times of India

Global Outsourcing Guide 2006 CIO/ A T Kearney

The CIO's global outsourcing guide, prepared by A T Kearney, brings out how the offshoring world has changed.

The Executive Summary

India remains the leading offshore destination by a wide margin, particularly for U.S. and U.K. companies. "Every year, the risks of moving work to India get lower," says Dean Davison, VP of strategic outsourcing for Nautilus Advisors. "India is increasingly more adept at IP protection, providing resilient infrastructure and managing global relationships effectively." Although Gartner estimates that India currently holds 80 percent to 90 percent of the offshoring market, wage inflation and the increasing maturity of other low-cost areas threaten its future dominance. And as India's star has risen, so have its turnover rates—a growing concern for CIOs. Consequently, Davison expects India's market share to shrink 20 percent by 2010.

Today, less than 10 percent of American companies outsource to more than one country but "most are evaluating multiple locations," says Davison. China, for example. Experts say it could be a powerful rival to India in the next three to five years, even though it currently can't match India's large English-speaking workforce, its level of compliance with international law or its number of IT grads.

Labor and operational costs in Central European countries such as Poland, Hungary and the Czech Republic—attractive outsourcing options for Western European businesses—continue to rise, approaching the level of their customers. So penny-pinching European CIOs are looking deeper into the former Soviet bloc, to countries like Romania, Bulgaria and the Ukraine. Latin American destinations such as Costa Rica, Mexico and Brazil are beginning to attract U.S. back-office and call center work as the need to service Spanish-speaking markets grows. And A.T. Kearney suggests that the Middle East and Africa may be the next frontier for offshore operations—if the politics of the area stabilize.

Although labor costs will continue to be the driving factor behind offshoring, CIOs must internalize the "cost-versus-risk equation," says Ian Marriott, research vice president at Gartner. When going offshore, common risks (infrastructure stability, process maturity, security) become more conspicuous, and uncommon risks (human resource predictability, political stability, rule of law or lack thereof) emerge. Increased competition for the offshore outsourcing dollar promises to raise standards around the globe, but more opportunity equals more risk, and choosing a location is an increasingly complex decision—one we're hoping the "2006 Global Outsourcing Guide" will help you make.

Outsourcing Is Forever - Jack & Suzy Welch

The issue for the U.S. economy isn't outsourcing -- it's bringing in more talent from overseas.

BusinessWeek columnists Jack & Suzy Welch say that the debate over outsourcing should be over by now. It was pretty much all about politics to begin with. The question now is not how do we stop outsourcing, but how do we use outsourcing to enhance competitiveness in what is, and forever will be, a global marketplace?

Well, I guess, this is another nail in the coffin of naysayers.

Resolved: Offshoring is good for America

A great debate featured on Fastcompany. As Ashok Soota points out the issue has to be seen at a micro level and a macro level.

At a micro level, one must empathize with anyone who loses a job whether due to offshoring or obsolescence. Assistance in reskilling such persons must be available at a social and structural level.
At a macro level, jobs lost in one part of the economy are replaced by gains elsewhere. A well-known McKinsey study shows that the U.S. economy gains $1.14 in return for every dollar of offshoring spend in India.

These numbers don't take into account the additional gains from Capital investment. For example, the majority of the funding for MindTree and many other companies is from U.S. sources (institutional and individual) who will benefit when we go public.
The U.S., as the world's largest exporter of services, is the largest beneficiary of open markets. Also, countries with more open approach to offshoring like the U.S. and UK have lower levels of unemployment than relatively conservative economies like Germany and France. All of the above reconfirm that offshoring is good for America.

To say that "if the current trends continue, the US will soon be running a trade deficit in its service category" is not based on facts. The US is the world's No. 1 exporter of services (per WTO/Dept of Commerce report 2005) at $318 billion with 15% share of the world services market. The next largest is UK with 8% share. Indian share of the overall service market (of which programming is a part) is a paltry 1.9%. That HUGE gap is not going to go away soon as feared by you.

On the re-skill issue, I must share with you what happened to computer manufacturing in India when the market was opened up to global competition. Most manufacturers had to shut shop and were replaced by IBM, Dell, Compaq and HP. What happened to the people in India who used to manufacture computers? Some re-skilled themselves, some changed professions and some I am sure, were left behind. The onus to learn and add new value is a global imperative.