High Cost Equates to Low Outsourcing Growth

Filed in archive Best Practice on May 28, 2007

Despite early predictions stating that outsourcing would continue to grow rapidly through the years, recent studies show this could not happen because of the continuous rise in expenses.

In this news piece, the attrition rate in India was described thus indicating that it could lead to the downsizing of the outsourcing industry in India. Here is an excerpt of the said newspiece:

A high attrition rate of nearly 40 per cent and an unprecedented hike in property prices, in the range of a whopping 100 per cent in the metros is severely affecting the growth-rate of the business process outsourcing (BPO) industry, limiting it to just 25 per cent, than its projected growth rate of 35 per cent in the next couple of years.

I have to agree with this particular conclusion because like it or not, cost is really a driving force in outsourcing.