Guy Kirkwood's BPO Backchat

29 may 2005

What are Indian newspaper unions scared of? According to a conference earlier in the month the top five are:

New technology
Direct foreign investment in the industry
Depleting union membership
Short-term contract employment
Outsourcing

Yes, you did read that correctly, even Indians are worried about losing their jobs to outsourcing providers.

Outsourcing was of two types: one, where Indian employers were giving some of the work being done by the workers to outside agencies. On the one hand, this was resulting in loss of employment of the existing workers in a company and on the other, employer was paying a fraction for the outsourced work. The middlemen were prospering in the process.

Similarly, jobs from Europe and America were being outsourced to India in search of the cheap labour and increased profits. As union members, we must understand that for every job that we get in India, a job is lost in the outsourcing country. And the beneficiary is always the employer because in India he has to pay only a fraction of the wages that he pays in his own country.

Obviously altruism to their unionised brothers is still important.

26 may 2005

James Rieley writing in the UK for the Telegraph, examines the non-cost issues of outsourcing.

Outsourcing can be a good thing. But there are more things to consider than just the obvious cost savings that might occur. Business costs are basically a function of two factors: cost factor number one is associated with actually writing cheques. You know, when you actually pay for something. This cost can be reduced through outsourcing.

Cost factor number two is not as obvious. This is where the costs are either disguised in the form of some other line item, or not even on a balance sheet. These should be of most concern because most finance guys don't even see them as legitimate costs.

I belive his thinking is a little simplistic, but the article is nevertheless worth reading.

25 may 2005

What is the problem with France? Outsourcing generally and BPO in particular are not as well-accepted in my adopted country. Even the French agree.

In a conference in the US this week Clara Gaymard, president of the Invest in France Agency Europe, said "There is the sense that we are old fashioned, unproductive, too obsessed with the quality of life. France actually has a higher percentage of 20- to 29-year-olds with qualifications in science or technology than the US or the UK."

To boost its competitiveness, France has initiated a range of reforms in the past two years designed to make it easier for multinationals to invest in local companies or erect facilities in the country. New laws, for instance, let employers negotiate around the onerous 35-hour work week. Foreign executives transferred to France no longer have to worry about paying income tax in France and in their home country. The pension system has also been changed, as has the visa system.

If France votes "non" to the EU constitution on Sunday, I predict that Nicholas Sarkozy will win the 2007 Presidential election and the necessary reforms will continue apace.

20 may 2005

Mick James is a respected name in consulting - as the former editor of Management Consultancy magazine, he has seen many of the changes to the market over the past decade. So, when he recommends that consulting firms should look outside its own ranks for management material, we really ought to listen.

19 may 2005

Is HR doing enough to secure its place at the top table?

With organisations typically spending around 60% of revenue on employees, decision makers in finance and human resources need to understand the contribution human capital makes to business performance.

Find out more from Management Today where I will be talking about the impact of HR outsourcing, shared services and offshoring on the HR community.

14 may 2005

Several commentators have been concerned about a potential downturn in the market - certainly the Bank of England has kept interest rates steady and are expecting to do so for the next "few months". Therefore retail news from the US is welcome.

It appears the US consumer may not have heard about the "soft patch" in the economy. That's evident in the government's retail sales report for April, released May 12. Overall retail sales surged 1.4% -- well above economists' median forecast of a 0.7% rise -- and 1.1% excluding autos, vs. the median forecast of a 0.5% increase. Not only was the headline April sales figure much stronger than expected, but back data were also revised higher. March's overall gain was revised higher to 0.4%, from the 0.3% increase reported originally. The March ex-autos component was revised to a 0.2% increase, from a prior 0.1% gain. If we exclude both autos and gas, the index rose a healthy 1.0% in April.

12 may 2005

A month spent "in the field" has been well worth the time. Business is booming. This is evidenced by candidate interest in consulting careers - of which we deliver one or two (!) - reaches a five-year high according to Top-Consultant.com.

Reporting its advert viewing figures, Top-Consultant revealed that UK ad views had risen from an average of 85,000 in the summer of 2004 to 130,000 in Q4 2004... and have now exceeded 250,000 for each of the last two months - a 5 year high. This staggering threefold increase in candidate interest has been achieved in just nine months - coinciding with the period in which consultancy recruitment demand has been at its most buoyant.