The race to the bottom continues as call centers move from India to the Philippines
by David Atkins
Big corporations just can’t get enough of that cheap, cheap labor:
Struggling to diversify the delivery footprint to take advantage of low-cost centres, India’s BPO industry is currently losing 70 per cent of all incremental voice and call centre business to competitors like Philippines and countries in Eastern Europe, says a report.
“It is estimated that in the ongoing decade India might lose $ 30 billion in terms of foreign exchange earnings to Philippines, which has become the top destination for Indian investors,” Assocham Secretary General D S Rawat said. Thus there is a need to reduce costs and make operations leaner across the BPO industry,” he added.
BPO companies could reduce the total operating costs by 20-30 per cent by moving to a low-cost city within India, with a cost differential of around 10-15 per cent for non-voice processes and upwards of 20 per cent for voice processes, the report pointed out.
Several Indian firms have set up substantial operations in Philippines which has a large pool of well-educated, English-speaking, talented and employable graduates. Almost 30 per cent graduates in Philippines are employable unlike 10 per cent in India where the training consumes considerable amount of time, according to the report.
The labor arbitrage game continues worldwide as corporations shift from country to country looking for highly trained workers to sell their labor for next to nothing on the global marketplace. These corporations are like parasites, putting jobs in one country for a decade or two, only to destabilize them and move the jobs elsewhere the moment something cheaper and better trained comes along.
Combined with increased capital mobility, labor arbitrage is giving corporations the upper hand in the battle with governments worldwide. The fate of the world’s economy–and, given the realities of climate change perhaps even the human race itself–will depend largely on whether the governments of the world can cooperate to neutralize the parasitic, plutocratic threat of global corporations.
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