NEW DELHI, Feb 2: The idea of ‘re-shoring’ jobs back to the developed world might be gaining momentum, but the country’s employment market is unlikely to see short-term impact, feel experts.
In recent times, there have been instances of some developed nations, including the UK, saying that there are opportunities to bring back millions of jobs from low-cost countries like India.
From a political and economic stand point, experts said, the idea of “re-shoring” might be an ideal situation to have for an economy. However, in terms of business, to remain competitive, companies need to do what is realistic and prudent, they said.
India is a preferred destination for business process outsourcing activities and thousands of people are employed in this segment.
Cost competitiveness and a large talent pool are among the key drivers for the country for remaining an attractive hub of off-shore work.
Job portal Naukri.Com’s Business Head V Suresh said that domestic companies need to wait and watch to understand how the trend plays out.
“I don’t sense the possibility of any knee-jerk response to this (re-shoring),” he noted.
“Off-shoring is a long-term business strategy and companies who decide to off-shore do it for multiple reasons. Hence, a sudden policy change may not have any short-term implications on the Indian labour market,” he added.
Even though re-shoring moves could have an effect on the Indian job market, experts felt that off-shoring jobs cannot be completely eliminated mainly due to cost-competitiveness.
Executive search firm Unison International MD Udit Mittal said that against the backdrop of recessionary conditions, companies in the West are “preferring a home-bound approach to promote their own workforce”.
“Countries can cut down on off-shoring but they cannot eliminate it as there is a huge difference in cost of using own manpower vis a vis off-shore ones,” Mittal noted.
Reflecting the changing sentiment in the developed world, British Prime Minister David Cameron recently had said that Europe should capitalise on opportunities to bring back millions of jobs from low-cost nations like India.
“Re-shoring jobs from India and China etc back to UK and USA will definitely have an impact… However, the extent of impact would be hugely dependent on the type of jobs (that would be re-shored),” recruitment consultancy TeamLease Services Co-Founder Mohit Gupta said.
Apart from India, China and the Phillipines are also considered as attractive destinations for off-shoring jobs.
There have been rising clamour from many developed economies about the need to create more jobs locally, especially in the wake of sluggish economic growth.
Notwithstanding concerns of many jobs going back to the developed world, some Indian firms, especially in the IT sector, are already recruiting more number of local talent in the wake of stringent employment conditions for overseas employees.
“These can be called non-tariff barriers imposed by those countries to safeguard employment within their country,” Gupta said.
Speaking at the World Economic Forum (WEF) annual meet last month, Cameron had also emphasised that the West cannot afford to be “starry eyed” about globalisation.
According to him, there is the emerging trend of re-shoring — where some jobs that were once offshored are coming back — from East to West.
Cameron had said Britain was determined to capitalise on its economic reforms and open markets to be a “reshore nation”.
Some companies are planning to shift manufacturing jobs from other countries to Britain and the employee costs are also becoming competitive, he added.
“There is a chance for Britain to become the re-shore nation. Europe needs to act now to seize the opportunities of re-shoring,” he had said. (PTI)