Title: The Great British Jobs Takeaway – Indian Call Center Abstract: This video

Question

Title: The Great British Jobs Takeaway – Indian Call Center

Abstract: This video explores the operations of a call center in India, and the benefits of operating the center in India as compared to Britain.

The Great British Jobs Takeaway - Skilled Jobs Going East - 3:24

Key Concepts: outsourcing, offshoring, global economy, trade, globalization, levels of economic development, theory of comparative advantage, theory of factor proportions

Notes: At eleven o’clock at night the work day is just beginning for workers at GTL Limited in Mumbai in India. GTL Limited sells life insurance over the telephone. So, while their countrymen may be sleeping these workers are making calls to Britain where it is early evening – a peak time for telephone sales. Workers making sales calls greet call recipients using the local time reference.

Workers at the call center follow a carefully scripted sales pitch and view sample dialogue on their computer screen. Many call centers like GTL Limited require workers to use an English name like James. The workers claim that doing so makes them seem more familiar to their target market. One worker thinks that using his English name makes it easier for British people to relate to him, but does not believe that his employer is trying to fool customers. Some call centers though, also require workers to disguise their location, and indicate to customers that they work in nearby towns.  

Call centers like GTL Limited can be found across the city and in other parts of India. Foreign companies have shifted their telephone sales and other activities to India to take advantage of the country’s well-educated, cheap labor force. Workers in India earn just 30 percent of what a British worker might earn. Making the process easier is the fact that jobs at call centers in India are popular. Many of the 1,500,000 graduates each year will seek employment in a call center. In fact, many call centers like GTL Limited actually require their workers to have a degree. British companies know they cannot compete with the inexpensive Indian call centers and so are actively seeking qualified Indian workers instead.

Discussion Questions: In addition to the video and abstract provided, find current event topics to address the following questions. Questions may be answered as numbered. Points will be deducted for responses lacking external resources.

1) In recent years, India has become recognized as a leader in providing customer care services. What makes India such an attractive location for companies looking to outsource their customer care activities?

2) Jobs in call centers like GTL Limited are highly regarded in India. Reflect on the growth of the industry and what it means for India. How does the growth of India’s industry affect countries like the United States?

3) Explain the basic ideas of David Ricardo’s theory of comparative advantage and Heckscher-Ohlin’s theory of factor proportions. How would David Ricardo and Hechscher-Ohlin view the growth of India’s call center industry?

4) Why do companies like GTL Limited require employees to adopt an English name while they work? What does this requirement tell you about companies that shift their low-skilled services activities to countries like India? Do you see any disadvantages to this practice?

Explanation / Answer

1) Reasons why India is an attractive location for outsourcing of customer care services because of the following points:

- it costs much lesser than hiring staff locally as they get cheap labour force easily here.

- the staff is well educated and skilled in their job.

- time difference allows them to take services for 24*7 throughout the year.

- developed infrastrcuture and technology helps in companies find the right place for rapid growth.

- hiring and placing staff is easy as skilled staff is easily avaliable in big number.

- outsourcing procedures and policies in India are easier.

2) Call center industry is rapidly growing in India where international companies outsource jobs of call centres to India and gain through it. Reasons why this industry is gorwing in India are easy availability of skilled staff, cost of hiring and setting up is less, advancements in Indian industries helping the companies to outsource their business and lenient policies of government for entry and set of such companies. Indian industry, employment levels and economy are growing rapidly by such companies outsourcing their jobs in India. It is resulting in an overall development in technology and human resource. More jobs are created every year as more companies select this pattern of outsourcing jobs through India thus giving India an opportunity to grow and the young skilled laour to be employeed for handsome salaries.

Countries like US gain benefits as well as have drawbacks of such growth of industry in India. It gives the US companies to find a market place with good competition and opportunity for globalisation. They can save good money by hiring low cost labour in such markets. The drawback is unemployment increasing within the country. As companies are set in India and skilled labour is hired here, the labour at US are considered expensive in comparison and thus not given job. This has resulted in unemployment in big number.

3) David Ricardo's theory of comparative advantage means when one country produces any goods or services at an opportunity cost lower than another country. The trade off can be measured by the opportunity cost and if the comparative advantage is high the trade off becomes beneficial.

The US companies gain a comparitive advantage by taking the services of call centers from India as they get this job done through cheaper workforce and on a cheaper set up. The workforce in India me not be so proficient in speaking english as their local workforce but as the cost of service provided by them is very lessit makes the trade off worth it.

Hechscher Ohlin theory of factor propotions is that the countries should export what they have in abundance and quality and gain from it and import what they cannot produce in the country efficiently. The factors of production determine what the country is capable of producing efficiently in the country and in what it lacks efficiency of production. Based on it two countries can maintain their equilibrium based on their specialization.

Outsourcing call center jobs of US from India is based on this theory as India is efficient in providing well educated skilled and cheap labour to US for the services of call centers hence they export those services in the form of outsourcing and get benefitted by it. For US to get this job in their county will be expensive hence they get the profit by outsourcing it from India instead of hiring local employees.

4) Companies require employees to adopt english names while they work so that they can connect to their customers more easily. The customer feels comfortable in talking when they hear a name familiar to their culture and not of a different one. Shifting low skilled services to India by companies make them use the skilled and efficient labour in India an lower cost than they would have to bear in their own country. Indian staff work hard and get underemployed for such jobs to earn an amount which is handsome enough for them. Such such companies take advantage of this factor and hire staff in abundance at less cost.

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