As was being expected, Barack Obama finally fulfilled his promise of formulating policies that will discourage “Outsourcing”, so that there are more job opportunities in the United States. So what is this policy?

Barack Obama finally initiated a bill that is still pending approval at the US Congress, is aimed at providing tax-cuts to companies that operate within US and imposing higher taxes and removal of tax benefits to US companies that outsource business to countries like that of India. While announcing this President Obama did not forget to make special mention of Bangalore. But is this policy going to work?

The United States of America is already reeling under severe economic recession. Quite a few of its top companies have gone bankrupt already. Will the US want its companies to incur more costs. Because outsourcing is here to stay. The cost-effectiveness that these companies see due to various cost factors in countries like that of India, including low cost labor, is something that they just cannot overlook.

This is what a report in the TOI had to say -

Domestic business process outsourcing (BPO) units providing services to the American companies will not be affected by the proposed

decision of US President Barack Obama to discourage outsourcing by imposing taxes, said global consultancy firm Ernst & young.

“The companies which outsource business to third parties will not be impacted (by the proposed tax move),” said Ernst & Young Tax Director Rajendra Nayak. However, he added, the US companies which outsource services from their own arms including wholly-owned subsidiaries might face the heat of Obama’s tax proposal, which is yet to be approved by the US Congress.

According to the E&Y expert, the captive outsourcing units of Americans will be impacted by the proposal as it would be required to adhere to the regulations of the home country. On the other hand, the domestic Business Process Outsourcing units provide services to companies from different countries, including America, will primarily be governed by Indian laws

and may escape the impact of changes in the US tax laws, Nayak said.

The step, he said, is directed at encouraging the US companies to do business in the US. However, the success of this objective would depend on comparative advantage that locations like India provide over the loss of revenue because of taxes back home in the US, sources in the Central Board of Direct Taxes (CBDT) said. The US companies would stop giving business to their subsidiaries in India only after evaluating if the benefit they have in India based on lower production costs

in the country is higher than the tax to be borne in the US itself, they said.

So if you look at the overall perspective, the impact of this policy on India is negligible. Hence we do not need to worry at this point in time and can be assured that indeed, “Outsourcing is here to stay”.

Finally there is some respite for the employees of Satyam. They were hanging in imbalance till about a few weeks back. All of a sudden TechMahindra came in and won a bid for their takeover and breathed fresh and new life into the otherwise dying organization.

What had happened to Satyam? Was it so weak that it would disintegrate, just because one Mr.Raju decided that he had made enough fool of everybody. Satyam is not that weak an organization. When Mr. Raju set up Satyam he gave it a meaningful name, but he couldn’t live upto it. Still he had built a huge organization on the foundation of truth which is why it was able to acquire huge businesses from huge clients. Satyam had a large clientele of over 500 clients -some of them as large as GE, Cisco, Citi and General Motors. This is enough proof that they are indeed a strong organization.

Add to this the strength of TechMahindra and the combined entity had catapulted to the 4th position in the IT firms list just behind HCL technologies. Under the leadership of a visionary like that of Mr. Anand Mahindra, I am sure that the TechMahindra-Satyam combine will do wonders.

All the best to all the employees of the TechMahindra-Satyam team.

As Satyam plunged into a deeper crisis with its founder and former chairman, B. Ramalinga Raju confessing to a financial fraud and later being arrested, the fate of thousands of employees at Satyam and its subsidiaries were hanging in imbalance. At this point of crisis there would be nothing more that general advice that anyone could offer these employees. Stay calm and monitor the situation. Things should settle down very soon. The kind of company Satyam was, with its magnitude and presence, there would certainly be a bailout that would happen.

Nipuna is the BPO arm of Satyam and has been in business for some time. It has offered stability and growth to its employees, thanks to the kind of businesses it has been handling. But what is in store for its employees is still a question without answers.

A look at similar instances from the past could give confidence to all of you who are going through this crisis situation. Satyam is a huge company to be dissolved overnight. The most viable option in front of the government and the corporate world is to put Satyam into some kind of acquisition or, takeover process. If that be the case then there is a bright future for all the employees.

So my advice like anybody else’s, at this point would be to remain calm and watch the proceedings. Have confidence in yourself. Your experience of all these years is more than enough to get you a job of your choice if you decide to change jobs tomorrow. So why go for an inferior option today, thus destroying your careers. Let the tide get over and you would see better days.

All the best to all of you.

Finally there is something for the employees of Satyam BPO to rejoice about. Satyam BPO (formerly Nipuna) is recruiting people for its latest business.

As per the latest news, Satyam BPO has finally closed a deal that was in the pipeline for some time and consequently required about 5- additional heads. Hence they have started recruiting for this business that they have just bagged.

“We are recruiting as per requirement for a particular new business which we have bagged recently,” confirmed Manjula Manjotra, head of Global Marketing and Communications (GM&C), Satyam BPO Limited.

“According to the requirements of a client, who has given a new business order, a batch of freshers have been recruited by the company. The brand Satyam perhaps still sells. None of our clients have backed out,” a senior employee of Satyam BPO said.

In the midst of the crisis that Satyam was going through, the employees were staring an uncertain future. In one of my previous blog, I had mentioned that the employees of Satyam BPO should remain calm untill the tide is over. Now that Satyam BPO is recruiting, they should be fine and should look forward to their career growth.

There are also talks of the BPO arm of Satyam being up for sale and reportedly, Essar Group’s outsourcing firm Aegis BPO is on the verge of approaching Satyam Computers for a possible buyout of its BPO operations. If this happens, then employees of the company would have more reasons to rejoice.

After quite some time there was encouraging news for the aspirants of a BPO. There was a lot news floating around in the media that there would be quite a few job cuts in the first quarter of 2009 and that the BPO industry’s growth will experience a slow down etc. But the below report from, "The Times of India", quoting the NASSCOM, has something else to say.

{Software and BPO industry body Nasscom on Wednesday said the business process outsourcing (BPO) sector is not in the danger of losing jobs due to the ongoing economic downturn rather a net hirer in the current fiscal. In a statement Nasscom said,
"Media reports suggest that the Indian BPO industry will see 2.5 lakh job losses by the first quarter of 2009, in the wake of downturn in the US and other developed economies. Nasscom’s research and interaction with its member companies is not in support of this statement."
Our detailed industry performance and forecast for FY’09 will be released in the next fortnight. However, on employment the industry will continue to be a net hirer in FY’09 as a direct corollary of industry growth and fears of large scale job losses at an industry level are unfounded." The industry body’s comment comes in the wake BPO Industry Association president Samir Chopra stating that "severe job loss is expected because of recession. We are going to request for a fiscal package from the government, but if that doesn’t happen, then there be huge amount of losses in terms of manpower. I think a quarter of a million jobs will go." The $11-billion BPO sector employs about seven lakh people.}

So now that should be encouraging for everyone, I believe.

Read the entire report here – http://timesofindia.indiatimes.com/Business/India_Business/No_job_cuts_in_BPO_sector_Nasscom/articleshow/3819113.cms

A few days back there were fears of a slowdown in the BPO business. Recession, Barack Obama effect and quite a few other things were the reason behind this. There was an all-round lull and rumor-mongers were out there on the streets saying that the BPO-boom is over.
And there happens these two deals and these rumor-mongers are back into their shells. All these talks about recession and the BPO slowdown are over now. The largest BPO in India, Genpact bagged a five year contract from, The Hyatt Corporation chain, covering its North American hotels for its accounting transactions.
Harmit Singh, CFO, Global Hyatt Corporation said: ‘‘We have a contract with Genpact for handling the accounting transaction services for some of our North American portfolio, which would be expanded moving forward.’’ From an initial nine hotels, Genpact’s Hyderabad unit will cover another six hotels next year and then 10 hotels by March 2010. The Hyatt group has 118 properties in North America

Also at the same time, another major BPO in India, Infosys, was awarded a five-year, multi-million dollar contract for information technology work by the British drug maker, AstraZeneca. Under the agreement, Infosys will deliver application maintenance services to AstraZeneca’s global operations in areas including manufacturing, supply chain, finance, and human resources

There need not be a conclusion to this post because any reader would now be confident of the fact that "BPOs are here to stay and make it big".

People working in BPOs have recently started to discuss another fear factor. It is the Barack Obama effect. What would happen now?

The Barack Obama effect is another syndrome that is very fast catching the BPO population. You might find people in groups, standing at a canteen or, in the cafeteria discussing what would happen to the BPOs, now that Obama has been elected the President of the US. His policies were clearly against outsourcing and that would mean loss of jobs in the BPOs again. As such companies were now handing over the pink-slip toits employees and there were huge retrenchment happening.

The problem with most of the people working in BPOs is the fact that they tend to speak on subjects that they don’t really research about and know much about. Gradually these casual talks take the form of a rumour and tend to hurt everybody from the employees to the employer. Having said that, I would certainly want to discuss on the subject in question so that at least a few of us understand what the actual story is.

It is true that Obama has said something about outsourcing. What precisely is it that he has said? In one of his speeches he happened to say that "he would bring back jobs to America – jobs that are being offshored to countries like India, by withdrawing subsidies that companies outsourcing such jobs normally receives". It is indeed true that he wants to cut down on the jobs that are bing outsourced. But is it possible for one president to decide one fine morning that he would stop ‘Globalization’. Of course, not. Globalization is a phenomenon on which many a country, even the ones like that of America thrives and survives. Cost effectiveness, economies of scale and quite a few things are all what globalization has leveraged. So withdrawing a subsidy to a company that outsources business is a very small part of the benefit that such a company derives from outsourcing. In addition to these subsidies, there are multiple other advantages that these companies get by outsourcing their businesses. Will they be willing to sacrifice all of that? They have to be given quite a bit of compensation in order to do that. Is it possible for Barack Obama to do that? The answer would be a big "NO".

Finance minister Chidambaram was the best to sum it up. Chidambaram, who said he was speaking as an individual and not for the Indian government, maintained that the Indian software and information technology-enabled services industry should not be worried over Obama’s policies.’A comment here or a comment there on outsourcing should not bother us,’ he said when asked to comment on the promises by Obama during his campaign to look into the issue of Americans purportedly losing jobs to countries like India.’Once he is in office, he will realise that this is an inter-connected world and countries have to work together.’

So, just chill guys. There is no threat to the outsourcing industry. There could be a slight decrease in the growth, but the outsourcing industry is here to stay.

There is fear in the air. The financial meltdown has created a scary environment and everybody is running helter-skelter and are trying to save their investments.

There is uncertainity also in the air and in the corporates. Employees are feeling insecure about their jobs and corporate are laying off people in heaps just because they have lost major businesses.

But what does this financial meltdown have in store for the BPOs and its employees? I would not want to sound too positive here and act as if there is nothing. Rather I would be very candid and direct in my language. That has already scared you, right? I know.

Yes, it is true that the financial meltdown will have its impact on the BPO industry. The otherwise steap growth that we have been witnessing throughout will witness a slight slowdown. This is but obviously because of the reduction in the amount of business coming into the outsourcing industry. A few BPOs who have been running processes for specific segments in the financial sector, would be the worst hit. These BPOs would have lost a few of their businesses and would hence be looking to layoff its employees or, redeploy them to other processes.

BPOs that are not financially sound will also be impacted to a great extent because of the cash crunch that the financial meltdown has put them into.

So employees in these kind of BPOs have to be extremely cautious and should watch out for signs. Know your company in detail and understand if they are financially strong. You can look out for options in better and financially sound organizations, though the fact remains that there are very few companies that are hiring right now. But under no circumstance should you panic.

Employees working in financially strong and huge brand names, this will also include all captive businesses, need not panic. Understand the fact that your organizations are capable of withstanding such meltdowns and can take care of their employees and businesses. So stay tight in your positions. A big advice during this tough time is "don’t look out for changes". Companies would hire you today and you might vene be lured with the good salary package, but…you would not know the financial situation of the company. What if tomorrow, they close down and you are rendered jobless? So employees working in captive BPOs, and brand names, stay tight in your positions.

Like all tough times, these trying times would also move and the growth of the BPO industry would be back to normal.