Is this a taste of the future? Outsourcing goes full circle as Indian firms look to the U.S. for cheap labour

Daily Mail – May 23, 2011

It’s a frustration experienced by most people when they’ve made phone calls to large companies.

An unfamiliar voice answers the phone in a call centre hundreds of miles away where cheap labour is commonplace.

But in a reversal of fortunes it now appears that large Indian companies are actually now themselves outsourcing – to U.S. shores.

Large corporations that have boomed in India amid the country’s nimble economy have been drawn to the U.S. where unemployment has soared.

Struggling residents desperate for work are paid between $12 and $14 a hour to be stationed in tiny cubicles for long shifts of telesales work.

Once the employees are established, many are offered the chance to be flown to India themselves – the same tactic Western countries have done in India

Experts said that the phenomenon, which could become more widespread in the coming years, is partly due to Indian workers demanding higher wages and higher living standards.

‘The U.S. became the fastest-growing location for us last year. We expect that to continue this year,’ Genpact chief executive V.N. ‘Tiger’ Tyagarajan said.

Joseph Vafi, an analyst at Jefferies & Co. in San Francisco told the Washington Post: ‘What you have going on in India are salary hikes. As these companies get larger and larger, it just makes sense for them to do some hiring in the States.’

The Indian economy – boosted by a savings culture of large cash deposits – has boomed and is this year predicted to outpace China.

Businesses around the world have targeted India – part of the ‘BRIC’ emerging economies – for their global expansion.

Residents there have seen an increase in living standards and higher wages, which has led to higher spending.

But in a stark contrast and further sign that global power is shifting from the West to the East, the economies of the U.S.- and many European countries – have spiralled downwards.

Around nine per cent of the work force is now estimated to be unemployed in the U.S. Massive debts have also seen harsh spending cuts.

Indian companies had previously used call centres at home, or shipped large numbers of local workers to the U.S. to work cheaply.

But a crackdown on visas by the Government combined with optimism in India has meant that fewer people want to leave. For Indian companies , it is just as efficient to open offices in America, where there are daily queues of people willing to work.

There is also a growing trend that companies want to have workers based in the countries where organisations have large customer bases, or wish to expand into.

Aegis Communications, based in Mumbai, joined the growing number of overseas companies opening centres in the U.S. to take advantage of the high unemployment.

They have nine centres in the U.S. which employ 5,000 people but that is expected to triple to 15,000 employees.

In Lower Manhattan, the call centre employs a large number of African Americans with few qualifications.

Line manager Ray Capuana said:  ‘Our recruitment model is simple. I don’t care if you come from Park Avenue or the park bench. If you can do the job, we want you.’

He calls the process of hiring U.S. workers instead of local workers in India ‘near-sourcing’, ‘diverse sourcing’ or ‘cross-shoring’.

But compared with Indian workers, managers have complained that those from the U.S. are ‘spoiled’ and ‘lazy’


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