Today's blog comes from Peter Allen, Partner and Managing Director, TPI.
I spent last week in India, meeting with leaders of several prominent India-based IT/BPO services companies. I also met with a few reporters. You can only imagine the number of times the same question was asked: What's the likely impact of the U.S. financial services crisis on the IT/BPO ecosystem in India?
Financial services firms have been among the most prolific employers of the India technical populace. While their loss to bankruptcies and acquisition over the recent weeks doesn't directly translate into job impact in India, the fact of the matter is that pain will be shared across the globe.
Without any specific attribution, I will tell you that there is a decidedly alarmed tone among the corporate leadership in India. Forget about particular client relationships, such as amounts owed by Lehman Brothers to its service providers. Rather, the concern is as much social as it is corporate.
The India-based IT/BPO economy has been growing without interruption since the fuel injected by the Y2K and Dot-Com coincidence. These two adjacent eras fueled a dramatic rise in the employment of young, educated professionals. The rising tide elevated captive offshore operations and outsourcing alike.
One senior executive of an India-based service provider offered the perspective that there has been little social groundwork laid in India for job displacements. If a captive operation closed its doors, the displaced workers will find themselves without much of a social support system. Further, the stigma of seeking public assistance is something that the Indian culture doesn't tolerate, especially among educated professionals.
On the bright side, recruiting plans are already being adjusted. I suspect that new graduates will continue to be brought onboard and that displacement will occur more commonly among those who just began to enjoy the prosperity of a job in the outsourcing and offshoring industry.
Globalization is a sword with two edges.
