May 27, 2006
Annual wages in offshore markets rising at 8 to 11 percent: Everest report
There have been several reports that wages in the IT outsourcing and BPO sector in countries like India are increasing disproportionately, and that the outsourcing industry will not be able to sustain itself in the long run. There are fears that in a few years' time, the economic advantages in outsourcing destinations like India will burn out, and that it will no longer be viable for outsourcers to seek vendors in these destinations.
However, according to findings of the Everest Research Institute, the picture is not that grim. Contrary to popular belief, wages in the outsourcing sector are rising at 8 to 11 percent on an average, nearly half of what has been generally projected. In India, the highest rise in wages is 13 percent for a senior customer acre executive in a call center. The majority of employees in the outsourcing sector only get a 6 percent increase.
The Everest report foresees that Asian markets (India, China, and the Philippines) will be able to sustain the offshoring activity for another 18-25 years. Central European markets have a smaller lease of life (3 to 6 years), while Mexico can ride high on the outsourcing wave for another 30 years, according to the projections in the report.
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