End of Outsourcing to India in years to come!

The Indian Outsourcing industry appears to be held up in a difficult situation with higher competition from the global clients and also lack of good talent. In the coming years, it is expected that outsourcing jobs to India will disappear. The Indian companies will rather be sidelined. As per the latest report published by Hackett group, the lifecycle of Outsourcing jobs to India will show a negative figure starting from the year 2014. This trend will complete its lifecycle within a span of 8 years to come. Hackett Group is a US based advisory and Research firm, which submitted its report at the NASSCOM Global In-House Centers (GIC) Conclave held in New Delhi.

The major highlights of the report published by Hackett Group is as follows

  • The study was conducted among 4700 companies in US and Europe. Those companies which had annual revenue of $1 billion were included in the study. As per the study results published, more than 2.3 million jobs in different areas such as Finance, IT, HR etc will be moved offshore by the year 2016.

  • India was critically affected by the recession period of 2009. In order to develop higher growth in the area of business services it is important to find out alternative resources to meet the increasing demands.

  • India is a popular outsourcing destination for many countries. As per the report, a new order in Outsourcing jobs to India will come about in the year 2013. Around 40% of jobs are being outsourced to India. A serious decline of 2% in this trend will happen in the year 2013. Other than India, there will some other low cost outsourcing destinations which can be relied on. Some of them are China – 13%, Asia Pacific- 19%, Eastern Europe – 20%, Rest of World – 10%.

  • It is expected that by the end of 2016 only 4.5 million jobs in North America and Europe will exist. The off shoring activities of retailers, insurance firms, banking and financial organizations add to $14 billion with respect to India’s IT BPO industry of $100 billion. The figures indicate that the number of potential jobs outsourced to India will show immense decline towards the end of 2016.

There are various opinions with regard to future outlook of job outsourcing to India. As per the report of Hackett Group, outsourcing jobs to India is expected to face serious set backs in the years to come. But, KPMG has disagreed with this report, by stressing the point that India has 6% of the worlds outsourcing potential. KPMG group expects that this figure is going to double by the end of 2014 which will pave way for future growth activities.

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