Outsourcing in India has almost reached a peak and any meaningful expansion from this point without rising cost seems impossible. Nowadays capacity is being moved from India to next step destinations like China, Philippines and Vietnam. Major business publications and business leaders are currently evaluating the viability of India and next step destinations.
Sykes, a large US – based contact center and IT support organization, is planning to shift much of its Indian capacity to Philippines and other Asian destinations to get higher rate of return. This rate must be quite high as the company plans to move after already establishing a sizeable capacity in India. Besides, many companies feel that Philippines is a long term destination of choice in spite of all the opportunities available in India. Product development in India and professional & customer services in Philippines is considered to be a safe bet in the changing environment.
The points going against India are overcrowding of companies trying to hire from each other; sky-scraping workers revenue rates; increasing payment costs and inferior English communication skill compare to that accessible in Philippines. Besides the infrastructure in India is already overstretched. China and Vietnam are proving to be competitors even to Philippines.
But this does not mean that India will suddenly lose its supremacy or drop its long-term charisma. It is too big an offshore outsourcing destination and it has the power to drive the industry due to its size and a pool of competent managers. Its growth seems to have slowed down because we see it in comparison to the immense speed of growth during the past few years. India’s current hire development is nearly twice that of US during its boom time. The constrains are not indicative of its weakness but its success.
The rising costs may be concerns for the business leaders because it means low returns but for the individual workers it means opportunity to raise their individual pays. So it is not a matter of concern for them.
Countries like Vietnam and Philippines seem to be attractive destinations today only because they were not successful at rising and attracting quality-outsourcing employer in the precedent. It should not be forgotten that pioneering achievements by India opened the doors to these Asian countries and their success stories.
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