India loses the charm of cheap labour

The recent move by UK- based telecom outsourcer New Call Telecom to move its call centre from Mumbai to the UK is another sign of India's advantage of cheap labour losing its allure.

New Call Telecom, which started the call centre in Mumbai three years ago, said that it chose to shift base to Lancashire as it feels that labour is cheaper in that country than in India. The shift will create around 25 jobs in the UK with the figure rising to about 100 in a couple of years.

The move by New Call Telecom, which provides broadband and telecom services, is not the first such. Two years ago, British Telecom shifted 2,000 call centre jobs from India back to the UK. This is a far cry from the days when companies from countries such as the UK and the US outsourced jobs to offshore locations in India as they had to pay staff less here. However, with salaries in India rising fast, some companies are finding it difficult to maintain profit margins.

Salaries in India Inc are set to rise by 12.9 per cent on average in 2011, according to a report by global human resource firm Aon Hewitt.

"Inflationary pressures and high attrition rates are major challenges for the Indian outsourcing industry. Indian companies are responding to these by starting their operations in Tier- II and Tier- III locations and by introducing employee engagement practices," said P. Vijayakumar of the Center for Social and Organisational Leadership ( CSOL) at the Tata Institute of Social Sciences ( TISS).

"The cost advantage depends basically on the effect of exchange rates and whether we are in a position to provide the skilled personnel needed by the industry," explained Vijayakumar.

The cost of renting space for business has also increased to the extent that it is now as costly in India as in the UK or some other nations, according to media reports.

Nigel Eastwood, New Call's chief executive officer ( CEO) told Daily Mail that, "Salaries in India aren't that cheap any more. Add to that the costs of us flying out there, hotels and software, and the costs are at an absolute parity." However, Amit Nivsarkar, vicepresident, Nasscom, said, "This is not any general trend that we have seen. The company policies to relocate may be behind such instances. Salaries at the entry- level are not issues in such cases as they haven't increased for the past three years." It is, however, not only firms from the UK and the US but also Indian IT companies that are hiring people in other countries in search of cheap workforce.

"Labour and realty rates vary from place to place even in India," said Viral Thakker, executive director at KPMG India, a business advisory firm.

Firms now aim to get a good talent pool at a low cost and will move to wherever they can achieve this goal, said Thakker.

Reproduced From Mail Today. Copyright 2011. MTNPL. All rights reserved.

Latest News

  • Oil prices push closer to $50, U.S. crude hits highest in seven months
    Oil prices push closer to $50, U.S. crude hits highest in seven months

    Oil futures pushed closer to $50 a barrel on Wednesday, with U.S. crude hitting its highest in over seven months after industry data suggested a larger-than-expected drawdown in U.S. crude inventories last week. Oil markets were also supported by an overnight surge in U.S. equities and strong home sales that could point to the Federal Reserve raising interest rates as early as June. U.S. crude futures had climbed 71 cents to $49.33 a barrel by 0652 GMT, after ending the previous session up 54 …

  • Asian shares gain, dollar firm as U.S. data soothes rate fears
    Asian shares gain, dollar firm as U.S. data soothes rate fears

    TOKYO/SINGAPORE (Reuters) - Asian shares jumped on Wednesday while the dollar firmed as upbeat U.S. home sales supported the view that the economy may be strong enough for the Federal Reserve to raise interest rates in coming months. U.S. interest rate futures are pricing in more than a 60 percent chance of a rate hike by July, up from around 20 percent about 10 days ago but still indicating considerable doubt in markets about how soon the Fed will pull the trigger. …

  • Banks still resisting rate cuts as liquidity row with RBI drags on
    Banks still resisting rate cuts as liquidity row with RBI drags on

    The Reserve Bank of India (RBI) has stepped up fund injections in the two months since Governor Raghuram Rajan pledged to gradually erase a cash deficit in the financial system, but commercial banks say it is still not enough for them to sharply lower interest rates. The RBI has slashed rates by 150 basis points (bps) since the start of last year, bringing the policy rate to a five-year low of 6.50 percent, but the country's banks have cut lending rates by less than half that, frustrating …

  • From hinterland to wonderland: China's 'teapot' refinery boomtowns

    BOXING, China/BEIJING (Reuters) - For Zheng Ruifeng, the 25-year-old son of a wheat farmer from eastern China, acceptance at a technical school specialising in petrochemical engineering was a life-changing event. Zheng, who grew up expecting to spend a lifetime toiling on the family farm, instead works as a technician monitoring control panels for Chambroad Petrochemical, one of China's largest independent refineries. Zheng's story offers a vivid example of the new wealth created by China's …

  • Euro zone hails 'breakthrough' with Greece, IMF debt deal

    The euro zone gave Greece its firmest offer yet of debt relief in what finance ministers called a breakthrough deal that won a commitment from the IMF finally to return to taking part in the bailout for Athens. After talks that lasted into the small hours of Wednesday, the Eurogroup ministers gave a nod to releasing 10.3 billion euros in new funds for Greece in recognition of painful fiscal reforms pushed through by Prime Minister Alexis Tsipras's leftist-led coalition, subject to some final …

  • Gold near 7-week low on Fed rate hike prospects
    Gold near 7-week low on Fed rate hike prospects

    Bullion has taken a beating from the prospect of an imminent rate increase, as indicated by Fed meeting minutes released last week. Gold is sensitive to interest rates, gains in which raise the opportunity cost of holding the non-interest-yielding asset. Spot gold was up 0.1 percent at $1,227.90 per ounce by 0317 GMT. …

  • Markets open on a positive note

    Mumbai, May 25 (IANS) The 30-scrip Sensitive Index (Sensex) on Wednesday opened on a higher note during the morning session of the trade. The Sensex of the BSE after opening at 25,432.10 points touched ... …

  • Money in hand: How to spend and still save

    Have a financial plan: Our personal finances are often in bad shape because of the absence of  a well laid out financial plan. The first step in financial planning is to sort out your financial goals. Decide your monthly targets for spending and saving based on your financial goals and current income. …

DON'T MISS

  • The Rs 80,000 crore milk business is on a tear

    If you thought that all the action in business was concentrated around the e-commerce sector, you could not be more wrong. The unlikely category of milk and dairy products has been seeing some of the most ... …

  • Charged up

    Reliance Jio's battle with other cellular operators over spectrum usage charges is set to escalate. …

  • Cracking the Code

    HackerRank is helping companies recruit coding champions through online tests. …

  • Poor Prediction

    A Niti Aayog presentation says poverty in India could be wiped out by 2032. Is it possible? …

  • Missing in Action

    Villages adopted by Gandhis make little progress. …

  • The VillageEconomy

    Inside: Model villages 68 / How India failed its poor 76 …

  • Hardly Adarsh

    Saansad Adarsh Gram Yojana, PM's pet project, has the potential to kick-start the rural economy, but is going nowhere if we go by the results so far. …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    69.85+1.05+1.53%
    SPICEJET.BO
    10.25+0.21+2.09%
    SUBEX.BO
    284.00-31.10-9.87%
    VRLLOG.BO
    21.10+2.80+15.30%
    ZEEMEDIA.BO
    53.55+1.05+2.00%
    SREINFRA.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    45.95+7.65+19.97%
    GAL.BO
    34.40+5.70+19.86%
    ELPROINTL.BO
    280.00+37.65+15.54%
    SHREYAS.BO
    21.10+2.80+15.30%
    ZEEMEDIA.BO
    37.50+5.00+15.38%
    ATLANTA.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    92.15-15.85-14.68%
    MATHEWE.BO
    370.50-47.75-11.42%
    TRANSPEK.BO
    189.00-21.40-10.17%
    CRAVATEX.BO
    23.05-2.55-9.96%
    ATHENAGLO.BO
    284.00-31.10-9.87%
    VRLLOG.BO

QUOTES

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.