Case study - The Call Centre Industry
The Call Centre Industry
China and Japan are widely acknowledged by India's software leaders to be the hardest outsourcing markets to crack. Japan has a perceived resistance to change among its country's businesses and a lack of urgency to innovate, while China's difficulty is ascribed to cultural differences. India's flexible private sector often finds it difficult to come to terms with China's more state-driven enterprises. Both markets pose linguistic challenges for an Indian sector that has prospered using English as its medium.
What call centres represent is a microcosm of economic and industrial conditions and trends. India, Costa Rica and the Philippines were chosen to host call centres because of their low wage rates, but relatively developed infrastructure. The savings on the staff wage bill by firms in MEDCs can be substantial. However, the economic tides are shifting and there are moves to reverse the process.
High unemployment levels have driven down wages for some low-skilled outsourcing services in some parts of the US, particularly among the Hispanic population. At the same time, wages in India's outsourcing sector rose by 10% between 2010 and 2011 and senior outsourcing managers based in the country command salaries above global averages. Indeed, Pramod Bhasin, the chief executive of Genpact, said his company expected to treble its workforce in the US by 2014.
In a another move which goes against the trend of sending call centre services to other parts of the world, Canon New Zealand and Australia have joined forces with Kiwi-owned company, Datacom, to bring the Canon contact centres back into Canon New Zealand's headquarters. This return of an operation or activity previously outsourced to the home country is referred to as backshoring, reshoring, or 'onshoring'.
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Explain the case for 'backshoring'.
