Case Study- Indian BPOs- Waking up to the Philippines Opportunity 1. How has the global economic downturn, discussed in the opening profile and throughout this chapter, impacted jobs outsourcing in the BPO industry? The global economic downturn has impacted jobs outsourcing in the BPO industry as it has helped to be one of the largest job creators in India. Due to this, many companies had to increase their operations output and therefore employ more and more people to keep up with the expanding trend.One of the major impacts, being growth and maturity, had an effect on the BPO industry and contributed to the outsourcing companies and continued growth of the industry. The IT and BPO outsourcing boom created a huge impact in the Indian economy and it increased the IT salary, cost of living, real-estate price and eventually it increased the outsource cost for many companies.
Job outsourcing seemed to be the only viable option as global economic downturn had created many problems when it came to funding and financial institutions.There needed to be cut backs in order to keep things afloat and most companies would see that job outsourcing would solve at least one of the many problems involved in the economic downturn. Not only does it mean that it will save companies in the US and UK money, by off loading jobs abroad for cheap labour, it also means that it’s giving countries like India and Philippines the opportunity that is needed to secure a faster growing economy and generating much needed jobs.The global economic downturn provided merges and many acquisitions for the BPO industry and helped to create certain flexibilities for some companies which helped with resource management.
The main reason why the economic downturn has impacted on job outsourcing in a major way is because it is cost effective and helps companies concentrate on core areas. It also contributes to improvement in productivity. 2. Referring to this chapter and this case, discuss the general trends in the globalisation of human capital.The general trend in the globalisation of human capital relates to efficiency, this is one of the key factors in ensuring that companies match the right skills with the right job.
It is important to continue to attract employees but also maintain existing ones, especially with job outsourcing, as it is cheap labour you still need to ensure employees are looked after properly. Personal choice and decision making is another trend that will always be required as that is what keeps companies competitive.With regards to the BPO industry in India and the Philippines, this applies as the Philippines are becoming more competitive. Companies may start choosing the Philippines over India as they have better language skills and less additional costs. The change in demographics and the rise of the knowledge economy is another trend as companies want to outsource to countries where the workers are more skilled and have a better grasp of the English language, this again relates to Philippines over India.
3.What are the effects of the Indian government policies on the Indian BPO industry and on MNC decisions regarding locations for outsourcing jobs? Locations for outsourcing jobs is very important as companies need to decide what is going to be the cheapest option but also the most beneficial in terms of maintaining their remaining clients and customers, there tends to be quite high volume complaints when it comes to outsourcing jobs, problems can arise often due to language barriers, so choosing the best location is key.India has one of the largest groups of low-cost English speaking scientific and technical talent. This makes India one of the obvious choices to outsource to. The 12 hour time difference also contributes as one of the benefits being that it saves time and money. The infrastructure of the Indian BPO industry is one of the main aspects why India is the preferred choice when outsourcing jobs, mainly to do with communications and other basic infrastructure.
The reasons why the big MNCs are interested in outsourcing to India, is because it occupies large and skilled human resources.The Indian government realises that IT can influence the economic development throughout India so it has become one of the top priorities. Some of Indians government policies have gone along way into making India BPO industry what it is now, by reducing licensing requirements and making foreign technology accessible, they will make the process of investment a lot easier. Nasscom has played a crucial part in helping the IT industry achieve its potential so that it can provide India with one of the best fields in the BPO industry.The Philippines advantage besides skilled and English speaking workforce and good communications infrastructure is that it is more familiar with the American work culture and the Spanish language. This is one of the biggest advantages that the Philippines has over India as there are 24 countries that speak Spanish, and for India to maintain it’s position as the top in the BPO industry and for MNCs then they will have to learn the language so they too can remain just as competitive.
