ABC News: India's Outsourcing Boom Runs Into Trouble
Dec. 24, 2005 — A chronic shortage of skilled workers is threatening India's outsourcing industry. Call centers and outsourcing firms are growing fast, but their human resources employees despair because most of the young Indians they interview are, they say, "unemployable."
Some people in the IT industry have said that only one in 10 graduates is worth taking on. "Just look at their English," fumed a frustrated Mumbai-based call center manager as he waved around letters written by employees. One read: "As I am marrying my daughter, please grant a week's leave." Another said: "I am in well here and hope you are also in the same well."
India employs about 350,000 people in the outsourcing industry and adds 150,000 new jobs each year. But filling those vacancies is proving to be a nightmare. At this moment, the industry needs to hire around 9,000 people but can't find them.
The crisis is set to worsen. The industry faces a shortfall of half a million workers in a few years' time, according to a study this month by McKinsey & Company and the Indian IT body Nasscom.
The specter haunting the industry is that it could lose its leading position as the world's "back office."
"If the industry has to go on paying higher and higher salaries to retain the staff it has, costs will rise and India will lose its biggest advantage — cheap labor," said Saurabh Wig, a former call center sales manager.
If the industry fails to recruit workers at reasonable wages, India will lose orders to countries such as the Philippines and China, according to Nasscom.
With half of its 1.2 billion people under age 25, how can India possibly be short of workers? The problem is not quantity but quality. Many of the 3.6 million graduates churned out every year by Indian universities are considered mediocre.
[...]
Could Foreigners Benefit?
The labor shortage, however, is good news for foreigners. Disgruntled British and American workers who have seen their jobs outsourced to India could get them back — with one catch. They need to move to India where their English and their accents will be an asset.
"When foreigners take calls from their respective countries, it helps that they know the culture of the person they are speaking to. That can often be the differentiating factor between a successful Indian outsourcing company and a failure," Avaneesh Nirjar, chief operating officer of Hero ITES, an outsourcing firm.
Young British graduates just out of college and looking for a year's travel and work experience are already taking jobs in New Delhi, Bangalore and Bombay. So are British call center workers looking for a change?
Currently, about 30,000 to 50,000 foreigners work in the outsourcing industry. But a World Bank report says that by 2009, up to 16,000 of those jobs will be filled not by Indians but by Britons.
It's estimated that, apart from fluent English speakers, the outsourcing industry will also need 160,000 professionals with European languages by 2010. Only 40,000 Indians are expected to have this specialization. The remaining 120,000 jobs will have to be filled by Europeans or Americans.
Dec. 24, 2005 — A chronic shortage of skilled workers is threatening India's outsourcing industry. Call centers and outsourcing firms are growing fast, but their human resources employees despair because most of the young Indians they interview are, they say, "unemployable."
Some people in the IT industry have said that only one in 10 graduates is worth taking on. "Just look at their English," fumed a frustrated Mumbai-based call center manager as he waved around letters written by employees. One read: "As I am marrying my daughter, please grant a week's leave." Another said: "I am in well here and hope you are also in the same well."
India employs about 350,000 people in the outsourcing industry and adds 150,000 new jobs each year. But filling those vacancies is proving to be a nightmare. At this moment, the industry needs to hire around 9,000 people but can't find them.
The crisis is set to worsen. The industry faces a shortfall of half a million workers in a few years' time, according to a study this month by McKinsey & Company and the Indian IT body Nasscom.
The specter haunting the industry is that it could lose its leading position as the world's "back office."
"If the industry has to go on paying higher and higher salaries to retain the staff it has, costs will rise and India will lose its biggest advantage — cheap labor," said Saurabh Wig, a former call center sales manager.
If the industry fails to recruit workers at reasonable wages, India will lose orders to countries such as the Philippines and China, according to Nasscom.
With half of its 1.2 billion people under age 25, how can India possibly be short of workers? The problem is not quantity but quality. Many of the 3.6 million graduates churned out every year by Indian universities are considered mediocre.
[...]
Could Foreigners Benefit?
The labor shortage, however, is good news for foreigners. Disgruntled British and American workers who have seen their jobs outsourced to India could get them back — with one catch. They need to move to India where their English and their accents will be an asset.
"When foreigners take calls from their respective countries, it helps that they know the culture of the person they are speaking to. That can often be the differentiating factor between a successful Indian outsourcing company and a failure," Avaneesh Nirjar, chief operating officer of Hero ITES, an outsourcing firm.
Young British graduates just out of college and looking for a year's travel and work experience are already taking jobs in New Delhi, Bangalore and Bombay. So are British call center workers looking for a change?
Currently, about 30,000 to 50,000 foreigners work in the outsourcing industry. But a World Bank report says that by 2009, up to 16,000 of those jobs will be filled not by Indians but by Britons.
It's estimated that, apart from fluent English speakers, the outsourcing industry will also need 160,000 professionals with European languages by 2010. Only 40,000 Indians are expected to have this specialization. The remaining 120,000 jobs will have to be filled by Europeans or Americans.
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