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Increasing costs send Indian call centers abroad
Washington Post - October 16, 2011
But as more US companies shift to cheaper destinations in Asia, many Indian call-center companies are also setting up operations abroad. These companies are finding not only lower costs and plenty of English speakers, but also better infrastructure and government incentives.
"India absolutely cannot take the voice-based call-center business for granted any more," said Sujit Bakshi, president of the corporate affairs and business services group at Tech Mahindra, an information technology services and outsourcing company with operations in the Philippines and Malaysia.
India remains the preferred destination for high-end work and IT support, but the country lost its label as the call-center capital of the world in the past year as salaries and other costs of doing business here soared. More people are employed by call-center businesses in the Philippines and Malaysia combined than in India, industry experts say.
Some Indian companies have tried to adjust by hiring less-expensive workers from small Indian towns or switching to high-end back-office work, including paralegal services, accounting and education.
But during the past three years, 13 Indian call-center companies have set up large offices in the Philippines and have trained and hired local workers, according to the National Association of Software and Service Companies.
"The growth in the Philippines is also being driven, to a large extent, by Indian outsourcing companies that are setting up operations there," said Sangeeta Gupta, the association's senior vice president.
Although Indonesia and Vietnam lack the IT infrastructure, number of English speakers and government support to attract many outsourcing business, analysts say both countries have the potential for growth in the coming years.
The Philippines earns about $5 billion a year from call centers, says the A.T. Kearney Global Services Location Index 2011, which rates business-friendly countries for the services industry.
Besides seeking cheaper destinations, global companies increasingly want a backup plan in case one country is hit by a natural calamity or unrest.
But the loss of business from US companies does not mean that jobs have dried up for India's swelling number of young graduates. As India's economy booms and consumption rises, customer care has become a vital function, fueling growth in call centers for local businesses. Many graduates prefer to work at those centers, where they can speak Indian languages and live in smaller towns.
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