Indian outsourcers have to head home

Indian outsourcing companies are facing shortages of good quality staff, particularly in the call centers and business process outsourcing businesses. The attrition rate in these two businesses can be as high as 50 percent, according to some reports.

Most staff are leaving to join other companies for better terms. But some staff are leaving because of burn-out, including the long commute time to and from work. Some others are women who leave their jobs to start a family. India’s traditional joint families, in which entire generations lived in one household, are falling apart in the cities, reducing the traditional support systems offered to new mothers.

Indian outsourcers could have access to more workers if they would allow more staff to work from home. Apart from young mothers, a lot of other categories of people, including freelancers and pensioners may be willing to join the workforce, if given the option to work from home.

In this way, the outsourcers would go a long way towards empowering a whole section of Indian society. They would also save on transporting staff to and from work, providing them meals in the campus cafeteria, and other perks employees have come to expect.

To be sure, customers will not take kindly to calls being taken from homes with the dog barking, the door bell ringing, or a child crying in the background. But once home workers see the opportunity they will make the adjustments necessary to ensure that the customer gets top quality service, undisturbed by any extraneous noises.

None of the suggestions outlined here are startlingly new. They have been tried extensively in the US and the UK. They are new in the Indian context, where surprisingly Indian and multinational services companies have been hesitant to move away from proven techniques and processes to exploring new sources of staff.

But there are still a lot of challenges going forward. Mothers and pensioners in India are less likely to own personal computers. Outsourcing companies use their computers over three staff shifts. Giving a computer to a single home worker would therefore lead to an underutilized asset. Probably companies can enter into an agreement with home workers whereby they take a computer on a bank loan, on assurance of business from the outsourcer. High quality telephone and VOIP (voice-over-Internet-protocol) links are available, and outsourcers can probably buy the capacity in bulk and distribute that out to the home workers.

The biggest sticking point is however likely to be data security, the fear that outside company monitored facilities, home workers could misuse confidential information such as credit card and social security numbers.

Companies are already masking at their facilities the data that could be used to compromise the customer. In many cases because of data security laws in their home countries, customers themselves are already filtering what information is available to a call center agent.

So outsourcing companies will probably have to rely less on physical monitoring using closed circuit TVs (CCTVs) and other technologies, and focus more on masking the data that is accessible to the home worker. There are also a lot of processes in business process outsourcing that do not require handling information that is confidential and liable to misuse.

Outsourcing outsourcing, or plain spin ?

India is outsourcing outsourcing, according to a report in the New York Times.

Ahead of the US elections, when outsourcing, and the loss of tech jobs in the US, will again likely figure as a big issue, Indian outsourcers have floated the new spin that they are in fact creating a large number of jobs in the US and Europe, nay outsourcing to the US.

Some link the creation of jobs in the US and Europe and other countries to the appreciation of the Rupee versus the US dollar, and staff shortages in India.

However, most of Infosys’ 75,000 employees are Indians, in India, says the New York Times report. India’s large outsourcers have about 60,000 staff each on an average in India, and having a couple of thousand staff in the US or Europe will not make the Rupee appreciation more manageable, or reduce staff turnover in India dramatically.

It is a case of making a large virtue out of a small necessity. Indian companies have been setting up operations in the US, Europe, and Mexico for some time, because their customers are demanding on-shore and near-shore capabilities in Europe and the US. They are also choosing low-cost locations in the US and Europe. When a company like Wipro Ltd. wants to set up operations on-shore in the US it will not go to pricey New York to set up shop, but to locations like Atlanta.

In Europe, which is slowly getting around to the idea of outsourcing, and its variant offshore outsourcing, customers are keen that their employees are protected. That means that Indian companies should be willing to take in staff from a customer – witness the deal between Infosys Technologies Ltd. and Royal Philips Electronics N.V.

So it is not that Indian companies are exporting jobs, or “outsourcing outsourcing”. They are just doing what they have been doing for years --- setting up operations closer to the customer, when required. Most of it used to be called on-site work earlier. As the H1-B visa regime got tighter in the US, or in Europe because of the need for language skills and to absorb staff from their customers, they have to hire locals. Infosys has employed local staff in Brno for over two years for their language skills.

It is hence a trifle arrogant for Indian outsourcers to claim that they are outsourcing jobs to the US and Europe. This is spin for the pols in Washington.

As of now about 85 to 90 percent of their staff are still in India, and it won’t change any time soon. Even after the appreciation of the Rupee and the rising wages in India, these companies continue to hire frenetically in India, because the comparative costs are still lower. Satyam, for example, is hiring 15,000 new staff before the end of the Indian fiscal year to March 31, 2008, according to this report in The Economic Times.

In contrast, Wipro Ltd. plans to hire 500 in Atlanta over the next three years, besides some 900 staff from its proposed acquisition of Infocrossing. Inc.

Spin about outsourcing to the US will not go down well with folks like Washtech who have been complaining that tech jobs in their thousands are moving from the US to India, and sure they have. By coming up with the lame one that they are also hiring a few hundreds in the US, Indian outsourcers can hardly hope to assuage the anxiety of anti-outsourcing lobbies.

Better to take the challenge headlong. Talk about the competitiveness offshore outsourcing is giving to the US. Inform the American people that a large proportion of employees in India are employed by Indian engineering centers of US companies. Tap into unstinted support from folks in the ITAA (Information Technology Association of America). But please, don’t insult people’s intelligence with the “reverse outsourcing” or “outsourcing to the US” spiel.

Related Article:

Indian outsourcers not floundering, not migrating

Bangalore: paying the price of economic boom ?

Bangalore, India’s software and call center outsourcing hub, is slowly emerging as a marketer's dream, with its whole lot of atomized and bored people. Offer them the malls and they rush there hoping for companionship and excitement that small communities once offered.

Why is the city becoming atomized ? Analysts in the city say that it has got to do with ever-shifting neighborhoods. The neighborhoods are changing - once upon a time they were stable communities of people who knew each other very well from birth through puberty through adulthood and old age. Neighbors once gossiped about one another, but they cared to gossip ! Conversation was possible because there was a common history, common issues, and everyone knew each other very well.

Now a neighbor can be a call center worker whose timings are not the same as yours. “If he disappears and the cops come asking, I can't say a lot about him...because all I got from him in the last six months was a sleepy "Hi", and yes he once told me was moving jobs to another city,” said Shankar, a long-standing resident of the city, about his neighbor.

The police are more likely to come asking about neighbors these days because the crime rate is going higher with muggings, rapes, suicides on the rise -- a by product of stressful lives, migratory populations, and resentment over a yawning economic divide, according to the pundits.

“The folks on the other side where I live are IT professionals,” said Shankar. “They have been around for one-year, and they are leaving for the US in the next six months. We have promised to write to each other.”

Just across from Shankar’s home are two gated apartments – a new phenomenon in Bangalore, patronized and affordable only by the very rich among the city’s software professionals and corporate executives. “I can only tell them from their lovely cars that zip in and out,” he said.

“I used to like to go and chat with some old friends over "chai" (tea), but we gave up because we couldn't make it because of different working hours, and some of them travel a lot,” said R. Ganesh, another second-generation resident of the city. When Ganesh had the time, he couldn't get parking even two kilometers from the teashop.

As Bangalore gets more affluent as a result of the boom in outsourcing to the city the number of cars, including expensive foreign cars, has gone up, even as the local government continues to neglect the roads and other infrastructure. A construction boom has also cut into public spaces.

“So now we use the technology wonder called "chat" on Instant Messenger. We :)) instead of actually smiling. I haven't figured out yet how one does a back-slap on IM, or a tight hug for a very good friend,” Ganesh said.

Enter the marketing guys who no longer offer only products, but whole experiences and a life style around them. “The new mantra is why are you being old-fashioned, clinging to that old tea shop which will get brought down anyways to give way to a sky rise building in glass, concrete, and steel ? Go instead for a wild-life safari, or join the golf club, or go to the swanky malls that have come up !,” said Ganesh.