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

  • Wall St opens lower as global growth fears resurface
    Wall St opens lower as global growth fears resurface

    Wall Street opened lower on Tuesday as weak Chinese economic data and a surprise rate cut by the Australian central bank fanned worries about the health of the global economy. Australia's central bank also sprang a surprise by cutting interest rates to a record low of 1.75 percent, the first easing in a year as it seeks to restrain a rising currency and insulate the economy from creeping deflation. "The negative news out of China and Australia having to stimulate its economy again is spooking …

  • U.S. Fed's Lockhart: Two rate hikes this year 'certainly possible', flags …
    U.S. Fed's Lockhart: Two rate hikes this year 'certainly possible', flags …

    The United States could see two further interest rate rises this year but uncertainties abound including the impact on the U.S. economy should Britain vote to leave the European Union, Atlanta Fed President Dennis Lockhart said on Tuesday. On that front, Lockhart said that incoming data between now and the Fed's next meeting on June 14-15 "is not comprehensive by any stretch of the imagination" and that the upcoming Brexit vote in Britain raised risks. "It is the repercussions for the U.S. …

  • Companies put $221 billion into low-tax jurisdictions in 2015 - U.N.

    Companies put $221 billion into countries with low tax last year, chiefly Luxembourg and the Netherlands, while $72 billion of investment went into two British tax havens - the British Virgin Islands and Cayman Islands, the U.N. said on Tuesday. The flows into the British Virgin Islands and the Caymans were roughly in line with historical averages but their source has shifted from rich to developing countries in recent years, the U.N. thinktank UNCTAD's report said. …

  • New York Times revenue falls on lower ad sales
    New York Times revenue falls on lower ad sales

    Digital ad revenue, which contributes about a third of total ad revenue, fell 1.3 percent to $41.8 million, while print advertising revenue fell 9 percent, the company said on Tuesday. New York Times, like many other newspaper and magazine publishers, has been trying to cut costs and push further into digital content as it struggles with diminishing revenue from its print division. …

  • Saudi plans stock market reforms to draw foreign money

    Saudi Arabia announced a string of reforms to its stock market that could attract billions of dollars of fresh foreign money and smooth sales of state assets as the kingdom grapples with damage to its finances caused by low oil prices. When Riyadh opened its bourse to direct foreign investment last June, it took a cautious approach, imposing tight ownership limits and minimum qualifications for overseas institutions to reduce the risk of them destabilising the market. Reforms announced on …

  • HSBC defiant on dividend payouts as profit fall stokes doubts
    HSBC defiant on dividend payouts as profit fall stokes doubts

    LONDON/HONG KONG (Reuters) - HSBC stuck to its promise of higher dividends on Tuesday after a 14 percent profit drop fuelled doubts among some investors about the bank's ability to increase payouts. The bank's dividend policy contrasts with European rivals including Barclays, Standard Chartered and Deutsche Bank AG, all of which have scrapped or reduced payouts as they grapple with restructuring costs. HSBC's dividend payout is already the highest among major European banks, according to …

  • Vodafone India's plan to go public will impact incumbents: Report

    Mumbai, May 3 (IANS) Vodafone India's plans to go for its maiden public issue to raise around $2-$2.5 billion can adversely impact incumbents especially as operators seek additional spectrum in the upcoming auctions for both 4G services and voice telephony, Macquarie has said in a report. "India's telco (telecom sector) sector is in a state of flux as the shift from 2G/3G to 4G gains momentum," the investment banking firm said adding that the offer from Vodafone India that could potentially be …

  • Singapore April factory activity shrinks a 10th month, but best level since …
    Singapore April factory activity shrinks a 10th month, but best level since …

    Activity in Singapore factories contracted for a 10th consecutive month in April, but the manufacturing index reached its highest level since June, with new orders improving, a survey showed on Tuesday. The Singapore Institute of Purchasing & Materials Management's Purchasing Managers' index (PMI) rose to 49.8 in April, the highest since June 2015. …

DON'T MISS

  • "The system is becoming more and more reliable"

    Ajay Bhushan Pandey, DG and Mission Director, UIDAI, spoke to Business Today on Aadhaar enrolment crossing the one- billion mark. …

  • Aadhaar's Identity Crisis

    Aadhaar enrolments have crossed a billion. But will the project make the desired impact on the ground? …

  • Keepers of the Law

    Mumbai-based Complykaro is helping companies comply with laws related to sexual harassment at the workplace. …

  • Costly Setback?

    SKS Microfinance's failure to win a small finance bank licence, even as its competitors got them, is likely to hit its growth prospects hard. …

  • Price-less

    The Mi 5 is a power-packed flagship smartphone with the best of features and comes at an unbelievable price. …

  • Impeccable

    Be it display, usability, camera or sound quality, the 9.7-inch iPad Pro is a spectacular tablet, but comes at a high price. …

  • Honey, i(Phone) Shrunk the Screen!

    Apple has relaunched a 4-inch iPhone in a market flooded with big-screen phones. Will this bring smaller screens back on the shelves? …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    15.02-0.48-3.10%
    SUZLON.BO
    74.800.000.00%
    SPICEJET.BO
    110.05-0.75-0.68%
    VEDL.BO
    69.75+2.10+3.10%
    IBREALEST.BO
    46.35+0.10+0.22%
    STAMPEDE.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    81.10+12.35+17.96%
    EMMBI.BO
    42.10+5.60+15.34%
    ANANTRAJ.BO
    12.30+1.40+12.84%
    KARNAVATI.BO
    39.50+4.00+11.27%
    NOL.BO
    117.60+11.80+11.15%
    BGRENERGY.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    15.20-3.80-20.00%
    RCRL.BO
    18.50-3.75-16.85%
    CEREBRAINT.BO
    10.70-2.05-16.08%
    SATINDLTD.BO
    14.80-1.60-9.76%
    GLXYENT.BO
    287.90-30.80-9.66%
    TVSMOTOR.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.

Yahoo Cricket