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BPO Journal

Friday, January 27, 2006

A global quest for talent

The Financial Times points to the ravine of labor shortage in India, suggesting that companies must turn to new pools of workers and adjust training, or pay the price of spiraling wages in a diminishing supply chain:

India produces 2.5m graduates a year. Only 350,000 are engineers and suitable for jobs in IT. The balance are arts, science and commerce graduates who form the backbone of recruitment for business process outsourcing jobs. They emerge from education centers of varying merit, from world-class IT and management schools to thousands of mediocre technical centers. The supply chain is already stretched. A report by Nasscom and McKinsey forecasts a shortfall of 500,000 professionals by 2010, when 2.3m workers will be required to maintain the country's current global lead in offshore IT service (65 per cent) and BPO (46 per cent).
The solution? The article points to three factors that could ease the growing mismatch between the supply of recruits and demand: more young people must be persuaded of the appeal of jobs and careers in IT; the quality of potential and current recruits must be improved; and attrition needs to fall, through, for example, more nuanced matching of applicants to appropriate jobs.

However, all these options assume India to be a lone supplier of the talent pool. Perhaps, another option exists. Indian service firms could well apply their skill and experience to large talent pools in emerging low cost destinations to efficiently scale their supply. This mutually beneficial proposition speaks for a structural shift in BPO arrangements from client-provider to client-integrator-provider. In large firms, such shortages might also result in more cross-institutional links between subsidiaries. For example, Infosys' Shanghai office largely offers end-to-end software services to domestic as well as multinational companies in China. But, as communication and collaboration technologies turn more sophisticated, we will see increased mobility of labor and capital between units to service a common talent pool.

All is still well.

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