Saturday, February 18, 2006
Labor Shortage Puts The Brake On India’s Outsourcing Growth
byIndia is a country of 1.1 billion people. With that many workers, it seems difficult to believe it can have labor shortages. However, a New York Times story reveals that a lack of skilled workers in that country could slow down the rapid growth of its outsourcing industry. There are huge demands on certain labor segments in India because many parts of the world are outsourcing customer support, software coding and other back-end office work to that country.
We all know what happens when demand exceeds supply: prices go up. That is exactly what is happening in India as salaries in some job categories are increasing 20 to 50 percent per year. At that rate, it won’t be long until there is less incentive and more hassle for companies that want to outsource to India.
The New York Times’ article mentions China and Eastern Europe as possible rivals competing for India’s outsourcing industry. Based on other stories that have been making the news, however, it appears China has its own labor shortages.
