Outsourcing goes full circle

By Freddie Pierce
Is the job market in the United States really this bad? In a report on The Daily Mail, the high unemployment rate in the United States is providing an...

Is the job market in the United States really this bad?

In a report on The Daily Mail, the high unemployment rate in the United States is providing an excellent outsourcing market for India.

According to the report, booming Indian companies are being drawn to the United States because of local labor unrest and work stoppages. With a large pool of cheap, unemployed, educated workers, the United States is becoming an ideal outsourcing location.

“The U.S. became the fastest-growing location for us last year,” Genpact chief executive V.N. Tyagarajan told The Daily Mail. “We expect that to continue this year.”

Outsourcing experts are saying the U.S. hirings are to be expected.

“What you have going on in India are salary hikes,” Joseph Vafi, an analyst for Jefferies & Co. in San Francisco, told The Washington Post. “As these companies get larger and larger, it just makes sense for them to do some hiring in the States.”

U.S. multinational companies have been outsourcing to India for decades, and that trend continues to grow today. As we reported earlier this month, India’s business process outsourcing industry has the potential to become a $250 billion market.

Gartner is projecting a 23.2 percent increase in the BPO market in India for 2011.

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This recent turn-of-events is an interesting twist in the ongoing outsourcing saga, as U.S. outsourced employees are given the opportunity to move to India once established, the same tactic used by Western countries to lure Indian employees.

U.S. employees are paid between $12-14 per hour, according to the report. Tata Consulting Services, Aegis Communications, Wipro, Genpact and Infosys are the five largest Indian companies that outsource jobs to the United States.

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