Indian IT companies reverse outsourcing jobs to US

US economy has been grappling hard with the slowdown and high unemployment rate in recent years. The experts widely believe that one of the reasons for increasing unemployment rate is outsourcing. US & Europe have been all throughout been known for outsourcing jobs to countries like India and Philippines which has created a furore in the domestic country. After Mr. Barack Obama rose to power he promised that he will stop American jobs from being outsourced, this very issue has started haunting the Obama administration again.

Now we see the trend of reverse outsourcing. It has been observed that Indian IT companies have actually slowly started outsourcing jobs to US and thereby bailing out unemployed Americans. The Americans who are looking desperately for a job are looking at these call centres who are paying USD 14 an hour. Indian outsourcing companies have started looking at US because of increasing wages at home. One of the companies taking the lead in this regard is Aegis, which is a subsidiary of Essar Group based in India. Aegis is pioneering the next wave of change that is termed as “diverse shoring”, “cross shoring” or “near-sourcing” in the outsourcing sector. Near sourcing is basically being close to the customers. Aegis now employs nearly 5000 US citizens, which is nearly 90% of the total employees in the US sites and they are looking at increasing it to 15000 in the next 3 years. They have got 10 centres in US. The other companies which are part of this new trend are Genpact, TCS and Wipro.

Hiring local people makes better sense of Indian companies because of the rising wage cost in the IT-BPO sector in the home country. It also works well for the Indian companies since local hiring helps to retain US clients and understand the market better. Some of the other advantages of hiring US citizens are:

  • Local Knowledge
  • Increased Efficiency &
  • Increased Socialisation

The problems arising out of increasing visa restrictions in US is also forcing the Indian companies to hire from the local market. Infosys is the latest company which has been embroiled in visa problems and now to overcome the impasse the company has started hiring fresh graduates from US.

There are some experts who feel that this new trend ushered by companies like Aegis cannot be termed as outsourcing. According to Ameet Nivsarkar, of Nasscom “This is not outsourcing, but it is local hiring”. Whatever be the new trend be called whether it is local hiring or near sourcing, the fact remains that Indian IT-BPO companies in future will look for hiring more of local resources as they increasingly look for moving up the value chain and face the challenges caused by high attrition levels, high wage inflation etc.

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