New Statesman 10 November 2003
by Praful Bidwai
Call a helpline these days and you may well speak to someone in India doing a job "outsourced" from the UK. Praful Bidwai reports from Delhi on a boom industry with serious downsides
Six days a week, as dusk falls over Delhi, 24-year-old Sumi Tiwari starts her long, rattling, tiring journey to suburban Gurgaon. It will take an hour, involving two buses and much jostling with an aggressive, almost all-male throng of commuters. Then Sumi will transform herself into Susan - wearing a skirt, or jeans and T-shirt, and a bandana, her arms tattooed, headphones in place. With 300 co-workers in a "business process outsourcing" shed (or call-centre), she will take her place for at least eight and a half hours on rows of bare, severe-looking desks with just 100 "seats" between them.
Susan spent six weeks in formal training to acquire an American accent and familiarise herself with the names of (if nothing else about) places she is unlikely to visit, such as Louisville, Kentucky, and Fayetteville, Arkansas.
Now, after 18 months in the job, Sumi/Susan wants out. "What I hate about the job," she says, "is not so much the money, which isn't great . . . it's the pretence and its psychological burden . . . You have to pretend all the time - that you are not 7,000 miles away from your client's location, but nearly there; that you're actually American sometimes British; that you share the same etiquette and mode of social conversation; that you don't hear the sexual innuendo targeted at you; that your jaws don't hurt speaking continuously in a strange accent; that the rudeness of tone you hear has nothing to do with racism."
But near by, at another call-centre, Ratna (Rita by night) - who went to the same lowbrow undergraduate college in Delhi as Sumi - wants to keep her job. Her working conditions are slightly worse: here, 450 workers share 250 "seats". Unlike Sumi, Ratna has to support her family: her father lost his job as a factory timekeeper two years ago and has abandoned all hope of finding another job.
Moreover, Ratna likes the call-centre's "cool, co-ed" atmosphere: there are three women for every two men, a rarity in any other industry in India. Work represents modernity and freedom in contrast to her extremely conservative family life. Ratna's anxiety is that last month her employer suddenly sacked 300 workers to comply with new US Federal Trade Commission rules, which impose fines of up to $11,000 a call for ringing numbers in the "do-not-call registry".
Just two years after starting from scratch, India's booming outsourcing industry - call-centres for product promotion or inquiries, medical transcription, booking and reservations - now employs 170,000 people and turns over more than $ 2bn annually. The revenue, according to estimates by International Data Consultants, will rise to $12bn by 2006 and $24bn by 2008 - equivalent to about half of India's current export earnings.
The strongest factor driving the boom is low costs. Wages in call-centres are 10,000-20,000 rupees (£130-£260) a month, about seven times lower than the salary that an American operator might earn.
But the threat to jobs in the North is not confined to labour-intensive, low-end operations. Software development and software operation are also migrating South - Indian wages for trained engineers are a quarter or a fifth of those in the North. The likely loss of 4,000 jobs in HSBC bank and plans to shift Britain's national rail inquiries system are only the beginning. Britain might see as many as 200,000 jobs lost.
The situation is worse in the United States, where an estimated 800,000 have lost jobs to outsourcing in the past year. One of them was a Silicon Valley programmer, Kevin Flanagan, who killed himself in May because he lost his Bank of America job to outsourcing. The cruel irony was that, before he got his marching orders, he helped train the Indians who were to replace him.
Gartner, the world's biggest high-tech forecasting firm, says that of the 10.3 million jobs in the US computer services and software industry, half a million could move to India by 2004, and at least as many to other low-wage destinations such as Russia. Forrester Research estimates that 3.3 million service-sector jobs will have left the US by 2015, half of them for India.
But the migration of jobs - the rise of the cyber-coolies - is not all good news for India. The industry's spread is uneven. More than two-thirds is concentrated in a handful of states such as Karnataka, Maharashtra, Andhra, Tamil Nadu and Delhi. Moreover, the industry is volatile and the turnover of jobs high. Labour attrition is estimated at nearly 30 per cent and projected to rise soon to 40 per cent. Call-centre bosses complain that most fresh graduates don't stay for more than 12 to 18 months.
Companies used to concentrate recruitment on the 18-24 age group from cities, but are now looking for older people, or graduates from smaller towns or poorer backgrounds, who might be less ambitious.
More than half of India's call-centres face financial trouble and are searching for buyers, according to the Economic Times.
Nor are the wages all that good. It is true that Rs10,000 is, in most states, twice the official minimum wage, which is in any case rarely enforced. Yet it is less than most government clerks or teachers get - and workers find, with little career development, that they soon reach a dead end. Young people take up call-centre employment basically because nothing else is available. Despite India's rise in GDP of 5-6 per cent a year, the pattern of growth is increasingly jobless.
Worse, perhaps, are the psychological and health problems. "Once you are logged in," says one worker, "you can't take breaks. You have to work continuously - except for a few short scheduled time-outs to go to the bathroom or grab a quick bite." Many women develop urinary tract infections simply because they cannot go to the toilet often enough. Other problems include acute anxiety; ear infections from contaminated headphones; ulcers and digestion problems from the hurried consumption of junk food; and, most common, depression.
Workers also complain of sleeplessness. Some shifts run from 4.30pm to 2.30am and, since transport is rarely available when the shift ends, the workers often do overtime. There are reports of heavy drinking and partying, and drug addiction.
The centres can get away with such exploitation because the cyber-coolies are almost wholly non-unionised. But as the industry expands and stabilises, it could come under pressure from public opinion, and perhaps legal regulation, to improve working conditions.
Other internal constraints could set limits on the industry's growth, especially in high-value-added sectors such as accounting or IT consultancy. Computer literacy in India is low and the general infrastructure poor. Only five out of 100 Indians are connected to the telephone system and the country has fewer than six computers per thousand people, compared with China's 19. Then there are the external limits. The legislatures of US states such as New Jersey, Connecticut, Missouri, Washington and Maryland have already imposed bans on outsourcing or are in the process of doing so.
The growth of outsourcing is bad for both North and South. Though a survey by India's National Association of Software and Services Companies estimates that for every $100 of work outsourced by US firms, $143 is invested back into the US economy in repatriated profits, increased sales of telecom equipment and cost savings, it's doubtful that much of this will go towards creating new jobs.
And in India, there is a robust debate about the wisdom of achieving high growth in the IT industry primarily through the low-wage, low-skill, low-value-added route - when most of the added value is skimmed off by Northern companies (some of them run by Indians settled in Silicon Valley). Thus, many Indians were involved in writing the sub-programs that went into Windows 95 and Windows 98. But Bill Gates took most of the cream.
As the corporate juggernaut rolls on, it will destroy livelihoods in the North and provoke a backlash there, which could include trade restrictions, and worse, xenophobia and racism. The South's choice is between remaining cyber-coolies and becoming cyber-sahibs - or at least dignified, secure IT workers. There isn't much clarity about the pathway to the second, except that it can't be based on call-centres.
If matters are left to the market alone, there won't be a desirable solution. However, there might be an alternative. What if the unions in Britain began to talk to employees of the outsourcing centres in India and jointly worked out a compact or code of conduct between workers, employers and governments in both countries on the basis of international labour solidarity? Such a deal would mean setting decent labour standards in India, including vastly improved working conditions enforceable by law; agreeing limits on outsourcing certain kinds of work; training and upgrading the skills of Indian workers; creating a joint fund for workers' welfare; and evolving guarantees of non-predatory practices.
This may not be as romantic as it seems. The Jamaican education minister, Maxine Henry Wilson, has called for precisely such a code in respect of recruitment of teachers from the Commonwealth. The code would ban "plundering" of each other's teachers. This may or may not work satisfactorily in the volatile outsourcing industry, but it is surely worth a try.
Praful Bidwai is a columnist based in New Delhi and former senior editor of the Times of India. His latest book, co-authored with Achin Vanaik, is New Nukes: India, Pakistan and nuclear disarmament (Signal Books)