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BLOG: Payback time for Indian outsourcers

Zafar Anjum | Jan. 30, 2012
It would only be in the interest of Indian outsourcers to employ more locals wherever they operate.

Offshoring is becoming a major political issue in the United States and Europe. In his State of the Union Speech last week, U.S. President Barack Obama attacked offshoring and urged businesses to bring jobs back to the U.S.

The outsourcing industry had to react.

Around the same time, The New York Times led a frontal attack on Apple for outsourcing the manufacturing of its super popular iPhones and iPads to Chinese factories. In the story, it was highlighted that Steve Jobs's one-time dedication to a "made in the U.S." approach had been sacrificed for business gains. Today, almost all its 70 million iPhones, 30 million iPads and 59 million other products sold last year were manufactured overseas, the article said.

Interestingly, in a meeting, when Obama asked Jobs what it would take to make iPhones in the U.S., Jobs said that those jobs aren't coming back. The abilities of the Chinese contractors to scale up and down production and the availability of hundreds of thousands of cheap hands has made it impossible for American businesses today to ship the jobs back to the U.S.

On the other hand, Indian outsourcing companies, who are also the top H1-B visa users in the U.S., have started to send out placating signals to the American socio-political system.

Indian outsourcing company HCL Technologies has recently announced that it would create 10,000 jobs for locals in the U.S. and Europe.

Chairman of Mahindra Satyam Vineet Nayyar hinted at creating jobs in the western economies from where they get bulk of business. "Indian firms when they go overseas, will have to create jobs there. We will certainly do so," he told Indian media.

Wipro chief Azim Premji, who understands that outsourcing is "getting hyped up since elections are coming up", is yet to make any announcements.

Given the climate against offshoring that is building up now, it is only a matter of time when more Indian outsourcers will come out with local hiring agendas.

The focus in the western world is on job creation amid economic uncertainties and rising unemployment. It would only be in the interest of Indian outsourcers to employ more locals wherever they operate. Otherwise the political backlash will be too heavy a price to pay.

Zafar Anjum is the online editor of MIS Asia, CIO Asia, Computerworld Singapore and Computerworld Malaysia.


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