When Steven Tyler and his Aerosmith bandmates left the stage of an arena in Bangalore, India, on June 2, 2007, they stopped to greet Accenture employee K.M. Venkatraman. “I was amazed,” Venkatraman says. “It was a once-in-a-lifetime

The systems analyst won backstage passes as part of an Accenture employee benefits program. A special Web site, the “Accenture Zone,” hosted online ticket sales for the event and distributed Aerosmith videos and music. At the same time, it advertised job openings at the company and offered discounted tickets to Accenture employees.

The program was part of Accenture’s strategy for attracting and retaining skilled workers for its business-process outsourcing (BPO) centers in India.

“We focus on the fundamentals of what our employees want,” says Pankaj Vaish, managing partner of Accenture’s worldwide network of BPO delivery centers. “We make sure they feel they belong, are cared for and wanted.” And they certainly are wanted. With economic growth nearing double-digit levels and a boom in information technology and outsourcing, employers such as Accenture must fight for the best talent.

Regulatory challenges, such as India’s labor and employment laws, create minor irritations compared with the difficulties of assembling and maintaining a world-class work force.

India Works
India isn’t the only place in the world where American employers can find low-cost skilled workers. Nor is it the only country with an English-speaking population or world-class information technology. But India is unique in having those things in relative abundance, all at once.

“The driving factor for many companies is the fact you can reduce costs by offshoring to India,” says Ross Docksey, a partner with Sonnenschein Nath & Rosenthal in Chicago. “But once they get into the country, companies find it’s relatively easy to train a group of managers in India that are even more adept than their counterparts in the U.S.”

In particular many Indian managers excel at process-engineering and workflow efficiency, which makes them ideally suited to activities that can be sent offshore. And India’s social and economic conditions foster resourcefulness and tenacity–excellent attributes for all workers, but especially those expected to deliver performance improvements.

“India teaches people to be extreme troubleshooters,” says Peter Douglass, president of Intersection Marketing Solutions in St. Cloud, Minn. “Indians figure out what to do rather than taking things at face value, and that ability to navigate through potential roadblocks gives them an edge.”

Perhaps more important, though, Indian workers are better educated than their U.S. rivals. Many call centers in the U.S. rely on a workforce of high school grads and even dropouts. But in India, where the median income is about $1,000 per year, call-center jobs offer enough income and prestige to attract college graduates.

“A superior level of education translates into a superior quality of skills,” Vaish says. “That brings benefits for companies, in terms of innovation, attitude and desire to work hard and make a difference.”

Revolving Door
All employers want motivated workers. And as anywhere, employers in India hang onto their top talent by giving out raises, bonuses and promotions. But in India’s overheated labor market, companies struggle to retain the competent majority of employees.

“It’s a very mobile society,” says Richard Goetz, formerly associate general counsel for Ford Motor Co.’s international division and now a partner with Dykema Gossett in Detroit. “Clearly there’s a revolving door, especially in the technical-university level in IT-related areas, given all the outsourcing jobs available.”

For many employees, factors other than money are drawing them out the door. Traffic congestion–a major problem all over India–can drive employees to seek work closer to home. And many workers in India’s young, brand-savvy work force will exit in pursuit of a more prestigious brand name or better job title–even employees who are basically happy with their current positions.

To address these issues, employers strive to make employees more than basically happy. They build facilities close to desirable housing areas, offer flex-time options that help shorten commutes and create career-development programs that provide internal mobility.

For instance, Accenture offers cross-training programs that give employees a chance to work on a variety of engagements, in a variety of roles. Such programs serve to broaden employees’ experience and skill sets, which helps both the company and the worker.

“Long-term advancement is important to people everywhere, but especially in India where you have this crop of young people who want to acquire skills,” Goetz says. “Employers need to make sure people don’t think their jobs are a dead end.”

In addition, companies provide extra employee benefits to distinguish them from competing employers. Special promotions such as pop concert tickets can help generate excitement, but companies are also jazzing up traditional benefits. Some companies, including Accenture, offer child-care services for working parents and allow employees to add extended family members to health insurance policies.

“There’s a strong focus on family in India,” Docksey says. “If health care coverage includes the employee’s parents or grandparents, it becomes more difficult for an employee to leave. Dad and Grandpa will say, ‘You can’t do that.’ “

Glam Life
Even more fundamental than benefits and advancement opportunities, the physical workplace can make or break an employer’s prospects in India. And many employers have made a huge effort to cater to young workers’ desire for Western comfort and culture.

On the Infosys campus near Bangalore, for example, an open-air food court offers Domino’s pizza and an amphitheater sound system plays pop hits while employees chat over lunch. On the weekends an in-house rock band, the Algorithms, entertains Infosys insiders.

“An Infosys campus is like a sorority or fraternity,” says Ajay Raju, partner and co-manager of the India practice at Reed Smith in Philadelphia. “People can relax and feel empowered on a campus that has a lot of amenities.”

Beyond amenities, however, geography can determine whether an employer can attract and retain the people it needs. Companies locate their offices in Bangalore or Hyderabad because those cities have developed large skilled work forces. But poaching abounds in such high-tech centers.

“Companies have found it difficult to retain employees in the first-tier cities, so they’re looking at secondary and tertiary locations,” Docksey says. “There are fewer multinationals in poorer states, such as West Bengal, Tamil Nadu or Kerala, so multinationals might find it easier to retain a work force there.” A s more compa nies disperse their locations around India, development will spread, bringing attractive jobs and benefits to employees across the country.

In turn, the skilled labor pool will expand and deepen, benefiting the companies who compete for India’s talent. If the country continues growing at its current pace, maybe Aerosmith’s next world tour will include a stop in Kerala or Tamil Nadu.

Employee Rights
Labor and employment laws vary from state to state but generally provide extensive rights and protections for employees in India.

Lifetime Employment
In effect, hiring an employee is a lifetime commitment. State authorities must approve any layoffs or terminations. In rare cases where approvals are granted, they impose strict severance burdens–frequently 70 days of pay for each year of service.

Public Holidays
Various regions in India celebrate different public holidays–mostly reflecting diverse religious traditions–which add up to dozens of paid holidays each year.

Socialist States
Leftist governments hold sway in West Bengal and Kerala, and these states impose stricter labor and employment laws. Laws limit the number of working hours at some facilities, for example, prohibiting three-shift operations.