HEY! THERE’S NO NEED TO PANIC...

Indian IT professionals have recently been at the receiving end, accused of

receiving preferential treatment over the US workforce and encroaching on jobs.

The negative sentiment created in places such as US, Singapore, Malaysia etc has

led to a political backlash and lobbying for stringent laws in the respective

countries to curb offshore outsourcing in the interest of job security.

Offshore outsourcing is real



But it is time for everyone to get wise and realize that offshore

outsourcing, even if considered only for its economic advantages, is here to

stay. The reality is that the Indian IT industry, especially the BPO space, is

very strong in terms of value creation and value enhancements. This is apart

from the traditional labor cost advantages, high level of functional skills,

English-speaking skills and other drivers that shift global focus towards India.

This is the sentiment that Nasscom also conveyed to the American government

recently. There is no panic, but certain policy issues like changing visa

regulations and other bottlenecks are a cause for concern.

One can say that the BPO backlash has triggered hindrances in quite

unexpected areas. The issue of visa restrictions is quite irritating. The US

government is arbitrarily rejecting L1 visa, which is considered to be an easier

route over the H1. This is causing hardship to companies registered across

multiple locations, increasing costs and unplanned expenditure. The US

government is demanding that companies show unique skills of the personnel to

necessitate the relocation, which is very arbitrary. Most companies have

multiple locations and this procedure is slowing down business processes.

Reasons for such a backlash have been:

n Possible job

losses in the US due to outsourcing



n Increasing

pink slips being issued to cut costs

Germany, US, Singapore, Malaysia are some countries where this ‘trigger’

effect is increasingly being seen. Industry associations and the Indian

government have lodged their protests and are trying to make appropriate

countries realize the futility of it such acts.

Government contracts form a very small percentage...



No doubt the $10-billion software and services industry is important to

Indian companies. However, the legislative Bills proposed in several US states

would cover only a minor percentage of government contracts that make up a minor

chunk of the BPO deals that originate out of the US. In fact, more than half of

the world’s top 500 companies including GE, Amex, etc. outsource work to India

and will continue to do so.

Such acts will not sustain in the long run, as offshore outsourcing work is

nowadays driven more by economic considerations. Labor unions, trade groups and

industry associations will definitely drum up support against such contracts

being signed and depriving employment to local personnel, but in any case, these

will be restricted to the government sector and in the global offshoring

scenario, this forms a minor chunk of business.

Frequency of deals being signed by Indian BPO players for clients in the

United States is going up rapidly and hence India is increasingly being seen as

a threat. Coupled with these are the layoffs in big companies which are

occurring at regular intervals, prompting apprehensions about job losses.

Nasscom ’s moves laudable



The Nasscom initiative is helpful in countering such developments. Nasscom

has presented information to members of the Assembly State Government Committee

of New Jersey discussing the benefits of outsourcing to other countries as a

matter of cost cutting. Other Indian industry associations, suppliers and

influencers should take Nasscom’s cue.

The Indo-American Chamber of Commerce has suggested that India and US

administration should devise a mutually beneficial formula for the restoration

of outsourcing of any work from India, which has been obstructed by the New

Jersey Bill.

Industry associations should start lobbying with the Indian government, as

also with the American chambers to portray the advantages of sourcing business

processes to countries like India. More such efforts are necessary.

Avinash Vashitha



The author is managing director of NeoIT.