What Is Future Of Out Sourcing Business In India And What Are The Threats From China And Singapore,& Thaland?
Posted by China Sourcing CommentatorAug 16
India has an advantage over Thailand and China due to the number of English speakers. They have an advantage over Singapore in the wages that workers are willing to accept.
Jobs will continually be outsourced to any country that can provide English speaking workforces that will work for less.
If China or Thailand begins training their workforce to speak english, India is in trouble.
I saw an interesting documentary about Indian workers who worked in outsourced jobs and a lot of the workers assumed that they were replacing american workers because they were better computer programmers or employees. that’s not it at all. It only comes down to the cost. If they could train a monkey to do the minimum amount of work to get by, they would hire them for a bunch of bananas.
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At the present moment there is no valid threat from these countries. there is competition, yes. Now the things working in India’s favor are:
- Population boom-> Available resources
-The availability of English speaking resources
-’Cheaper’ labor.
Now China is NO threat at all, thanks to their not being able to speak English and higher costs.
Singapore has a good English speaking population, but can not compete with India on the price/wages/cost front. But yes, the quality of resources is good.
Thailand’s the same story, again!
If you observe, you will see a fascinating new trend in the Indian Market. ALL/Major IT companies and ITES are moving to Tier2 cities like Coimbatore, Cochin, Trivandrum, Mysore, Belgaum etc. So, thats a new development.
But yes, the outsourcing is here to stay!
Cheers!
Future Prospects
The future for the IT/BP industry holds bright. It is estimated that 56% of the BPO market could be India’s by the year 2006 with the demand for BPO services increasing at an annual growth rate of 50 per cent during 2004-06. The pace at which the Indian BPO market is increasing is tremendous. The market of BPO in India is likely to be around $9-12 billion by the year 2006 and will employ around 0.4 million people. The BPO market is ready to fire up and India Inc is all geared for this big opportunity.
This is really great news for India Inc since we have to tackle the BPO backlash as well. Though there are chances of this party being spoiled by the US led backlash but then also India is sure to have a large share of the BPO market. This will go a long way in making India the BPO super power of the world. If the backlash stays on for sometime, then may be India could only have a 42% share of the market instead of 56%. Though it is a reality that companies outsourcing their business operations to Indian BPOs have been saving a lot of money and also saving jobs of their own countrymen.
the future will be safe
no threats from those 3 countries
Companies outsource jobs to India because the cost of skilled labor there is cheaper than it is in the US. For example, the loaded labor rate for computer engineers in Silicon Valley is close to $200K year (wages + benefits + overhead(computer/office/heat etc..)). In India a engineer with the same education might have a loaded labor rate of $75K/year. Odds are the engineer in India studied at a US university, so their education levels are on par.
At some point, probably many years in the future the loaded labor rate in India will get closer to the US, at that point the cost advantage doesn’t make up for the other disadvantages like time differences (they are working while we sleep, making live conversations a challenge), language barriers, travel expense.
the future of outsourcing is good as long as there is demand for mannual labour, cheap salary, though it is very high for us, but u would attract competition which we should not scumb to it. the threat is mainly competition coz there again it is good salary for indians.