Desi BPOs Expand in US

Indian back-office processing firms are planning to expand operations in the US following a fall in real estate prices and labour costs and a rise in anti-outsourcing sentiments there.

The industry, which traditionally followed the offshoring model, is now looking to open facilities and hire locals in low-cost locations in the US. Their aim is to woo first-time outsourcers and win projects in highly-regulated sectors.

As these firms boost their onshore presence and follow the IT services industry in hiring locals, their business model is set to shift from a primarily offshore-revenue model to an onsite-offshore model, companies and experts tracking the sector said.

“We see the BPO industry changing. Based on the availability of skill and cost, about 15-20% of work will eventually be done in local geographies,” said Sanjiv Kapur, senior VP and head of BPO at Patni Computer Systems.

This shift comes even as the more high-profile IT industry attracts flak for not hiring locally in countries such as US and UK.

Last year, a legislation proposed by senators Chuck Grassley and Dick Durban sought to prohibit firms that have over 50% of staff on H-1B and L-1 visas from hiring more people on these two visas. Indian IT firms are the biggest users of H-1B visas but in contrast, their BPO arms have limited use for them because most of their projects are done offshore.

But as new opportunities — unlike the traditional outsourcing format — open up, BPO firms find merit in having onshore facilities and hiring locally.

Share on Facebook