The boom in the particularly the BPO sector, may well be over. The country has exhausted its skilled labor force, and new projects that are outsourced to India may not enjoy the same level of expert work force.We recently reported on a slowing down in the Indian BPO sector because of a shortfall in skilled workers. We also expressed concerns over other factors like rising costs and security threats in India, which may hamper outsourcing.
According to a government report, the demand for skilled labor is far outweighing the supply, and there may be a shortfall of 260,000 workers by the year 2009. This will also lead to many professionals switching jobs for career advancement, and in turn employees will be forced to attract professionals by offering them better pay packages. These factors will lead to escalation of costs, and India may well lose its edge as a low-cost destination India.
Quality, too, is likely to suffer as the top available talent has already been absorbed by the industry. As a result, service providers have no option but to recruit from a level below their optimum requirements. This makes high-quality in-house training a critical factor.
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