Indian wages rise – off-shoring ROI evaporates

Interesting piece in the UK Independent today reporting rising Indian wages rising to 75% of the US level (20% only two years ago).  This is good news for Indian developers but bad news for companies who have off-shored purely and only to save cost.  No wonder US companies are finally starting to bring software engineering work back to their shores.

In the UK where IT off-shoring has been prevalent but not quite to the same degree as the US we wait to see if the same trend emerges.

Maybe we are getting to the stage where work will be placed for reasons of skill, geography, culture, convenience, service and team motivation – not just for cost reasons.  Or maybe work will just start transferring to the Far East, Russia, and Africa.  UK and US universities have plenty or representatives from these regions so the skills must be emerging.

Of course, I am referring only to the IT sector.  The Independent reports Indian call centre wages still significantly lower than in the West, although staff turnover is starting to spiral.  Smart companies who have outsourced important customer service operations (to the detriment of customer service), should take note before this turns into another wage spiral and eats up their ROI.

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