Customers still continue to see value in offshoring to countries like India and the Philippines, Arora said. They are however still cautious about their spending, and business from Europe is still uncertain, he added.
Indian outsourcers are meanwhile hiring in anticipation of new business. Infosys added 7,646 staff in the quarter, taking the total to 122,468 employees as of Sept. 30.
As hiring picks up, Indian outsourcers are also relying on contract staff to cut costs, and to meet staff requirements for short-term contracts, Das said.
About 10 to 15 percent of outsourcers' staff are contract staff which are available at cheaper rates than staff on the company's rolls, according to Das. Typically people on contract are those who did not get permanent jobs, and have less specialized skills, he said.
Outsourcers are trying to cap salary hikes in the 15 to 20 percent range, Das said.
The salary costs of their Indian staff is a small proportion of the total costs for Indian outsourcers, Arora said. So a salary hike in India is not a big hit on margins, he said. Most of the companies are hiring university graduates, he added.
Sign up for MIS Asia eNewsletters.