India's salary growth threatens outsourcing

[charrison]

linkage

Rises in the wages paid to Indian IT workers could lead to the country pricing itself out of the offshore-outsourcing market


Eastern Europe may also become more attractive as an offshoring centre. Last September, a research report estimated that a recent graduate of a specialist university in Romania could be hired for $6,500 (£3,572) a year in software development. An additional possibility is Russia, another country that produces more bachelor's degrees in engineering than the United States.

"There is great competition for cost, and there is a view that India is getting more expensive," said Pete Foster, a research director at Pierre Audoin Consultants, which released the report. "Europe represents a good opportunity and a new area to find resources -- but it is virtually ignored by the UK."

 

[Ferocious]

Yes indeed.

The company I work for will be shipping jobs over to Romania soon.

 

[StormRider]

This is why I'm theoretically not against outsourcing. Although it's something I wouldn't want to happen to me, I think the lost of jobs is a short term event. The other country's standard of living will rise and their salaries will grow as a result. Soon we will become competitive again. Because the other country's standard of living rises, they will become future consumers of our goods.

So, with outsourcing, what should happen is:

1) In the short term we have lost of jobs.
2) In the long term, other countries standard of living rises.
3) In the long term, we should regain jobs as we become more competitive.
4) In the long term, the rest of the world becomes future consumers of our goods.
5) In the long term, the world's standard of living rises.

 

[CanOWorms]

I have a friend who knows some people that run call centers in India who are outsourcing their outsourced work to China.

 

[Genesys]

Originally posted by: StormRider
This is why I'm theoretically not against outsourcing. Although it's something I wouldn't want to happen to me, I think the lost of jobs is a short term event. The other country's standard of living will rise and their salaries will grow as a result. Soon we will become competitive again. Because the other country's standard of living rises, they will become future consumers of our goods.

So, with outsourcing, what should happen is:

1) In the short term we have lost of jobs.
2) In the long term, other countries standard of living rises.
3) In the long term, we should regain jobs as we become more competitive.
4) In the long term, the rest of the world becomes future consumers of our goods.
5) In the long term, the world's standard of living rises.

yup, thats pretty much the same thing ive been thinking too.

 

[GoPackGo]

Originally posted by: CanOWorms
I have a friend who knows some people that run call centers in India who are outsourcing their outsourced work to China.

So it will move from one unintelligible accent to another?

 

[Dissipate]

Originally posted by: CanOWorms
I have a friend who knows some people that run call centers in India who are outsourcing their outsourced work to China.

Hehe, yep. China is going to undercut India. Losing jobs sucks but protectionist policies are harmful in the long run.

 

[SuperTool]

Actually someone I know in Russia is outsourcing work to Bulgaria.

 

[RabidMongoose]

I know someone in India that is outsourcing to China where it is again be outsourced to Russia. The Russians are then outsourcing it to Bulgaria and then the Bulgarians are outsourcing it back to the US!

Everyone wins!

 

[Martin]

One thing that often goes unmentioned is that a lot of the outsourcing is done through middleman-type companies. There was an article on slashdot a while back...they mentioned that even though indian programmers make ~15000/a, companies charge ~40000/a. Plus, none but the largest companies can afford to directly set up shop there.

As long as developing nations keep up their rapid growth, we won't suffer to much. I'm still in school and I'm not really worried.

Originally posted by: SuperTool
Actually someone I know in Russia is outsourcing work to Bulgaria.

Lol. I might actually get a job there this summer. One of my brother-in-law's friends went back there and almost immediately got a nice job.