DOING BUSINESS BETTER. TOGETHER

Outsourcing away

13 Aug 2010 12:00 AM | Anonymous

India already holds at least 50% of the global outsourcing market, and has become the world's back office where Western firms set up call centres, number-crunching and software development outlets to cut costs.

It is, therefore, not without good reason that the visa bill which, if passed, would double the cost of visa application fees and add $200m in visa costs to Indian companies, has had such an unsettling effect in India.

Compared to the US, David Cameron’s statements during his visit to the Indian sub-continent a few weeks back was quite the positive one – comments about Pakistan notwithstanding. Maybe if chicken tikka were also a national dish in the US things would be different…

Indeed, HM Revenue and Customs is considering outsourcing sensitive tax processing work to India, a move that would save tax payers as much as £205m a year. Meanwhile, the British Council could outsource 100 IT and finance jobs also to India; the Foreign and Commonwealth Office as well as the Treasury could all have similar plans.

Outsourcing may be what Cameron had in mind when he devised his ‘Big Society, Not Big Government’ election campaign.

Thus the UK remains open to outsourcers provided there is increased inward investment in the UK.

But while this provision may have been intended to appease the public in general, that jobs are not off-shored does not mean that they won’t disappear; after all, efficiency often comes at the price of redundancies.

Certainly the government probably expects that the private sector will absorb some of the jobs lost in the public sector. But what happens when budget cuts also mean that private sector companies (working with the government) have less money with which to work, grow and create jobs?

Quite a tough decision to make: on one side cost-saving measures supported by efficiencies resulting from outsourcing. On the other increased unemployment, the problem of redundancies and increased cost of benefits.

Ah, the bitter-sweet taste of the path to economic recovery!

Powered by Wild Apricot Membership Software