Thursday, July 12, 2007

India faces tough competition from China in outsourcing business

by Vipin Agnihotri

No doubt, India is the most preferred destination for outsourcing at this moment of time but for how long they will be able to maintain their position only time will tell because China has started giving tough competition to them. All this is happening because of India’s high attrition rate, poor infrastructure and increasing wages.

If the recent global outsourcing survey of Frost & Sullivan are taken into account, India is the most preferred outsourcing destination followed by China, Ireland, Singapore, Malaysia, Mexico, the Czech Republic, Poland, the Philippines and Canada.

The best part about this survey was that it covered around 300 multinational firms in seven sectors, namely, financial services, technology, health care, fast-growing consumer goods, transportation, energy, and media and entertainment.

When individuals were asked to give their opinion on top three outsourcing centres, India scored 2.25 followed by China 1.76 and Ireland 0.77. Despite being at top of the ladder, the wide talent pool possessed by China is quite a worrying sign for India.

If experts are to be believed, despite churning out three million graduates annually, demand for experienced professionals in India is outpacing supply, which in turn leading to attrition levels of up to 40% or higher, especially in the technology sector.

Survey also came to the conclusion that financial services and technology forms more than half of outsourcing spending last year and are expected to rule the roost in the coming years as well.

 

 

 

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