Staff churn as well as cost and service levels will mean more UK jobs come back from India?

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Is a combination of factors making India less attractive as a centre for delivering services to the UK?

Jean Louise Bravard, director at sourcing broker Burnt-Oak Partners, believes the gap between offshore and onshore is closing.

He says there is currently a trend that is seeing UK companies bring work back onshore. He  says this is happening and it is related to the high turnover of staff in India. This causes increasing costs and reducing service levels, says Bravard.

"Staff churn is a continuing problem in India. Indian companies often have 10% churn every month."

He says the cost of replacing a worker can be 25% of the annual salary so it is costing a lot which will eventually be passed on to the customer.

He also said service levels will decrease because staff are constantly changing and have no time to establish relationships with the customers.

Additionally he believes that suppliers that are trying to win business with the UK government might feel they need to create UK jobs rather than send work offshore, which might also reduce the attractiveness of offshore service provision. "If you want to do business with the government creating jobs in the UK is a good idea."

There could be something in this. Last vweek banking giant Santander last week announced its plan to set up a UK call centre to replace one in Mumbai. This will create 500 jobs. The reason for doing this was the fact that customers had complained about service levels.

And in the previous week New Call Telecom which provides telephone services and broadband said it is leaving Mumbai and setting up a datacentre in Burnley because rental and Labour costs are lower.

2 Comments

Yes, but who is going to get those jobs that return to the UK? Call-centre jobs are one thing, but many of the highly skilled IT workers who were thrown on the scrapheap in recent years are no longer available for any returning IT jobs. Unless they have been lucky enough to find similar jobs in the meantime, their skills will have become obsolete, they will have become older, and IT recruiters typically refuse to consider older workers, especially if they don't have the very latest skills. So even if some of the IT work returns to the UK, we have lost much of the skills base and experience that would allow us to take full advantage of those opportunities. My guess is that these jobs will be filled by cheap ICT imports from India in the end.

Karl - read the latest government guidance on offshoring public sector IT:
http://www.cabinetoffice.gov.uk/resource-library/government-ict-offshoring-international-sourcing-guidance

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This page contains a single entry by Karl Flinders published on July 12, 2011 4:11 PM.

Emerging economies might eventually make UK businesses second class IT services customers was the previous entry in this blog.

Will there be an IT offshoring U-turn at Birmingham City Council? is the next entry in this blog.

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