A new report released by the Associated Press is highlighting the issues of outsourcing jobs on Indian workers’ health. While the report lacks any hard evidence and focuses on a handful of individual cases, data released by the Indian Council for Research on International Economic Relations estimated the cost of these increased health issues, namely sleep disorders, heart disease and depression, could amount to $200bn for the Indian economy over the next 10 years "if corrective action is not taken quickly".
As we discussed here on HFS a few weeks’ ago, the business case for organizations outsourcing certain services to locations closer to home (or even at home?) is becoming increasingly appealing – especially for those services that require a high degreee of interaction between the organization and its outsourced workers (for example software development). For those services where the offshore workers need to be operating at the same hours as US companies, for example customer support / help-desk services, the Indian workers must adapt to working swing-shifts and unsocial hours. My concern here is that Indian culture is very family and social-centric, and these types of jobs are becoming increasingly less desirable for many workers who go into these jobs initially to enjoy the increased compensation on offer, but are quickly realizing the trade-off with their lifestyle, health and family / social issues. As long as outsourcing providers are servicing US businesses from India that require a large degree of worker overlap, they are going to be faced with increasing issues of attrition and rising wages to keep workers in these jobs. This is the chief reason why the Latin America region is on the cusp of a major upswing of taking on outsourced jobs that benefit from the time overlap. At the same time, it increases the appeal of UK and European-centric services being run out of India, where the time differences are far less oppressive on the offshore workers.
These health and social issues are very symptomatic of a developing economy like India – and my only surprise is the speed at which they are happening. I believe these issues will only be magnified when work is outsourced from US businesses to China, where the time differentials are even more brutal, and the language issues much tougher. That is one of the principal reasons why China is (and will continue to be) far more successful at taking on services such as engineering and manufacturing, where these worker interaction issues between offshore staff and Western organizations and their customers are less crucial.
Is India growing up too quickly?
Posted in : Captives and Shared Services Strategies, HR Strategy, IT Outsourcing / IT Services, Sourcing Locations
If someone is a shift worker, he can face physical problem of peptic ulcer eight times that of the normal worker. Shift workers also have an increased risk of cardiovascular disease.
The other physical problems that they can experience are excessive sleepiness, chronic fatigue, and difficulty in sleeping.
Divorce rates are also increased due to rotating shifts. If they are in rotating shifts, they are at increased risk of substance abuse and depression. They will also feel that their job is stressful. Due to shift work, accidents also increase.
I have seen the Indian IT industry for more than 7 years and I have seen a few of my colleagues working in night shifts and odd hours. Though odd hours are fine, but I don’t think that the night-shift model can work in Indian IT Industry. Before I explain why, let me quote a real life example.
A few of my friends joined the offshore development centre of a major US Investment bank because the bank offered them a hefty pay rise. But the job required them to work in night shifts for a couple of weeks in a month on regular basis. Initially few shifts were fine but gradually they started feeling an impact of it on their personal life. They spent the best part of the day (evenings) at work rather than being with their families and it was a terrible feeling for them. Within a month, frustration had set in and people around in that office had started thinking about moving out of the company.
To cut the story short, companies might be able to attract people by offering them high pay packages but this is not a sustainable model. Indian families are very close knit and if any member of the family is missing at supper time, it is seen as very bad. IT Engineers won’t be able to live an upset life style for long.
The model could work in BPO Call centres but it can’t work in IT industry because:
(a) In IT industry, there are larger numbers of day jobs that exist whereas people joining BPO industry had limited choices for their set of skill sets. Companies trying to implement this model in IT Industry will face higher attrition rates and it would be a very tough challenge to hold talented individuals.
(b) BPO industry could sustain high attrition rate because call centres in UK/US also had higher attrition rates as compared with other industries in UK/US. So clients were fine with higher attrition rates. Indian IT Industry cannot withstand high Employee Attrition rates.
Still this is my personal opinion and reflection of a person who has been in this boat. I am still keeping my fingers crossed and I am keeping a watch on developments in Indian IT Industry.
MBA Student 2007-08
Cranfield School of Management
Not sure what corrective action could be taken as the reason for outsourcing is rate arbitrage and taking advantage of timezones.
The best alternative is rotating the staff every 6 months within shifts. There is a definitive plan for the individuals and hence can keep them going for a definitive period. Compensation at 1.5 times the day salary rate could be another option.
Perhaps if companies were more honest about the use of off-shoring there wouldn’t be as much of a need to hide the fact that they were overseas and thus operating on a different time zone.
Of course not all processes should be outsourced/off-shored. Perhaps limit it to those that do not require being on the same zone makes sense, there are after all many other problems related to this as well.
Blogs are good for every one where we get lots of information for any topics nice job keep it up !!!