Business Process Outsourcing - Another comment
On March 5, 2004, we wrote that market forces would work against India as preferred outsourcing center in the long run - but still nogood news for displaced workers in the US.
ComputerWire quoted a study by PMG and Nasscom (the Indian Association of Software and Services Companies) in its March 17 edition, that India would face labour shortages in the IT and ITES industry in 2009 when the market for employees would have grown from 400,000 in 2003 to 2.1 million in 2009. Apparently, these estimates are based on the current 13% annuial increase in graduate supply, but of those, only 1-2% are capable of or will choose to enter the IT-enabled services industry.
This is compounding already high attrition rates (30-40%) and growing salary levels. It states, and here it comes, that the average cost for an employee has grown from a level of US$200 per month in 2001 to US$300 per month in 2003.
The article doesn't state what is included in these costs - is it only salary, or material that is used for working (computers, telephones) or even the costs of space occupied by the employee. But what it shows is that India is succumbing to cost pressures, just as any other country. And that other countries line up to take the space - but what, if there is no other country left, after all the Vietnam, China, Mexico, Ghana? It shows, that costs alone is not enough to compete on and that in the end, it is value that counts. Might this also be a recipe for all the other countries affected by this?
(By Asia Business Consulting)
ComputerWire quoted a study by PMG and Nasscom (the Indian Association of Software and Services Companies) in its March 17 edition, that India would face labour shortages in the IT and ITES industry in 2009 when the market for employees would have grown from 400,000 in 2003 to 2.1 million in 2009. Apparently, these estimates are based on the current 13% annuial increase in graduate supply, but of those, only 1-2% are capable of or will choose to enter the IT-enabled services industry.
This is compounding already high attrition rates (30-40%) and growing salary levels. It states, and here it comes, that the average cost for an employee has grown from a level of US$200 per month in 2001 to US$300 per month in 2003.
The article doesn't state what is included in these costs - is it only salary, or material that is used for working (computers, telephones) or even the costs of space occupied by the employee. But what it shows is that India is succumbing to cost pressures, just as any other country. And that other countries line up to take the space - but what, if there is no other country left, after all the Vietnam, China, Mexico, Ghana? It shows, that costs alone is not enough to compete on and that in the end, it is value that counts. Might this also be a recipe for all the other countries affected by this?
(By Asia Business Consulting)
posted by Andreas @ 11:50 pm
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