According to a report presented by strategic consultancy firm The Hackett Group during the Nasscom Global In-House Centers (GIC) Conclave, offshoring of jobs from the US and European countries will begin to decline in 2014 and eventually come to an end in 8-10 years.
The offshoring research team at The Hackett Group surveyed 4,700 US and Europe-based companies in the $1 billion revenue bracket. The report showed that 2.3 million positions in finance, IT, procurement, and HR will be filled by offshore providers in 2016.
Martin Geerling, Director at The Hackett Group said India, the most popular offshoring destination, should find or develop a bigger market to continue growing because the boom in demand for outsourcing brought about by the 2009 economic meltdown is diminishing. In line with that, Hackett anticipated that the 40% share of India in the business process outsourcing (BPO) industry will drop to 38% in 2013.
Meanwhile, Nasscom said offshore captive centers of retailers, large banks, and insurance companies account for $14 billion of India’s $100-billion IT-BPO sector. The Hackett Group also noted that of the 8.2 million exported jobs from North America and Europe since 2002, only 4.5 million will be retained in 2016. On the other hand, Partner and Head of ITBPO of KPMG Pradeep Udhas did not agree with the report from Hackett, saying that there’s still ample room for India to grow.