|Rediff India Abroad Home | All the sections|
BPO alarms UK as jobs move to India
V Mohan Narayan in London | November 04, 2003 12:05 IST
Perturbed over grim projections of job losses touching a staggering 200,000 in coming years as a result of 'outsourcing' by big companies in the United Kingdom, a direct beneficiary being call centres in India, Britain's trade unions are gearing up for a spate of countrywide protests.
Drastic cut in costs in the range of 30 to 70 per cent, a better quality in services and stiff competition are pushing more and more companies to establish their call centres in India.
"When people lose jobs, you will find them protesting. This is a normal process inherited from globalisation," says noted industrialist Lord Swraj Paul.
Observing that the government was not directly involved in this, he said in all probability, the situation would work itself out.
"It revolves around more and more competition. The sooner this sinks in, the better it will be for the affected companies," he said.
But this view is not shared by others.
"The unions are loud about the problem of outsourcing. It is becoming one of the biggest issues," Robert Blackhurst, editor-in-chief at the Foreign Policy Centre, told a group of visiting Indian journalists.
HSBC has already spoken about plans to employ 8,000 people in India, China and Malaysia in the coming few months.
Telecom giant BT is contemplating creating 2,200 new call centre posts in India and insurance company Aviva proposes to set up a 1,000-strong call centre and claims-processing unit in India.
Analysts predict that 100,000 of the existing 600,000 call centre jobs will disappear between now and the end of 2008.
Consultants Deloitte and Touche projected India as the main beneficiary of an expected outsourcing of 2 million jobs, mainly related to administrative and technology spheres, in the next five years.
UK-based IT group Logica CMG plans to go in for an expansion programme in outsourcing in India in a big way. It already employs 350 people in Bangalore, developing software and providing customers with telephone and internet support.
"The company will employ at least 1,500 in India by 2005," its managing director of global outsourcing Bob Fawthrop was quoted as saying.
"We will use a blend of different people to offer the cheapest cost. There is no risk to the customer. It is our risk," he said.
Tesco, the supermarket chain, has joined the likes of British Airways, Prudential, HSBC and PowerGen by announcing its own plans to move jobs to India.
India's potential was first identified by General Electric in the mid-1990s when it shifted a large number of back office jobs to the sub-continent.
According to consultant firm McKinsey, over 200 of the Fortune 1000 companies have now outsourced in India.
And what has today become a mushrooming $1.5 billion industry for India, is predicted to grow at a whopping pace to $21 billion by 2008, according to property consultants Cushman and Wakefield.
Asking Britain's trade unions to show a sense of fairness, UK's Deputy Prime Minister John Prescott felt it was unfair to blame India for loss of British jobs.
"The trade unions here must show a sense of fairness towards India vis-à-vis winning outsourcing deals from some of Britain's biggest firms. The furore is unfair and India must be given a chance to develop its skills and markets," Prescott said while speaking at a reception hosted by the Labour Friends of India recently at Bournemouth.
A study by the Federation of Indian Chambers of Commerce and Industry said British companies which outsourced in India have gained much and have become globally competitive.
Strong concerns have also been voiced over reports that moves were afoot to outsource to India railway and airline inquiries.
"Call centres are cost sensitive. We have to concentrate on high-value jobs," feels Hughes Harris, director of London First Centre, an inward investment agency which provides free and confidential service to companies considering London as a business location.
Two leading British banks Lloyds TSB and Barclays have also announced their plans to shift more than 1,000 banking jobs to India as part of outsourcing to cut down costs.
Lloyds said it planned to close its Newcastle call centre, employing 986 people, at the end of next year and Barclays spoke about a review of its Hastings operations.
"We operate in a fiercely competitive environment and it is vital that we find ways of running our business effectively and competitively," said a Lloyds bank official.
Lower wages, higher skills, attractive infrastructure rates and other facilities and a 'conducive' environment to promote business are factors that are making India the most preferred destination, a British official said.
Aware of the growing potential, upward-looking profit margins and immense growth prospects, call centre managers in India are hard selling their services here, eager to do business with the bigger companies.
An Indian IT professional, working here for the last four years with a fat pay packet, is now packing his bags to return home.
"The trend has reversed. Many of us are returning for the same reason we left in the first place. Growing opportunities, good money and wider reach. If we can get this in India, why look elsewhere?" he asked.