Indian outsourcing no longer cheap
Many British companies outsourced work to India where costs were low. But in recent years, increasing prices in India have made it a less attractive option than retaining the work in the UK, reports say.
New Call Telecom, which competes with BT and Sky to offer home telephone services, broadband and low-cost international calls, is opening a call centre in Lancashire after being attracted by low commercial rents and cheap labour costs, according to a report in the Daily Mail.
According to The Economic Voice, New Call's CEO, Nigel Eastwood, says in the report: “We did a cost and service analysis of returning home and there was an absolute parity between what we are paying for a third-party call centre in India and here in the UK.”
The new call centre will operate out of rented property and employ 25 people. But it is not just in the UK where this is happening.
A decade ago, companies from the US and the UK arrived in India in droves attracted by India's low labour costs, notes The Financial Times.
But this is no longer true as the economic boom bought on by liberalising reforms has pushed up costs. Real estate prices have spiralled while companies have struggled with wage inflation and staff retention.
“Voice-based call centres have attrition rates of 25% - 35%, which adds to operation costs,” says Arup Roy, a research analyst at Gartner, an IT-specialist market research consultancy.
As India's upwardly mobile young professionals frequently switch jobs in search of higher wages, salary increases in the IT outsourcing industry in India are expected to average 11.9%, according to Aon Hewitt, the global human resources company.
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