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More high-end jobs to move to India

October 20, 2003 18:47 IST

The outsourcing phenomenon, that has rocked the US and the UK with thousands of jobs moving out to low-cost nations like India and prompted big growth in Indian call centres, will soon extend to higher paid white-collar jobs as well, according to management consultants in the West.

Last week HSBC Bank joined Lloyds TSB, Prudential, National Rail Inquiries and Bank of America in announcing that it would slash costs by moving thousands of jobs to India.

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According to United Kingdom-based Forrester Research, HSBC and the others represent just the tip of the iceberg with some 750,000 British jobs being moved offshore in the next decade.

In the United States the figures are even higher with predictions of at least 3.3 million 'non-farm jobs' being offshored by the year 2015.

Significantly, according to Forrester, at least 50,000 of the UK jobs will be higher paid senior management jobs.

Many of these are expected to come to India, while other Asian countries like China and Sri Lanka soak up some of the lower paid employment

Les Mara, a vice president of consultants, Cap Gemini Ernst and Young, says: "Offshore outsourcing is no longer just about call centres and low content activities; it's about skilled work too."

Global management consultancy McKinsey & Co, which has a large office in Chennai, recently estimated that a software developer who costs $60 an hour in the US, can be hired for only $6 an hour in India.

McKinsey has taken on board the growing resentment in Western societies at the numbers of jobs that are being lost as they are outsourced to countries like India.

But McKinsey echoes the British Foreign Office line that outsourcing is a two-way process. Where the US is concerned, McKinsey says that for every 33 cents in the dollar that stay in the outsourced country, five cents are returned through the purchase of goods and services from the US economy.

This helps to stimulate trade and ultimately more jobs as well.

Shyam Bhatia in London