PICTURE the scene. It’s just after lunchtime and a young worker dressed in jeans and an open-necked shirt is heading off to his regular IT support job on the edge of town.
An everyday scene you might think. Only, in this case, it is not one being played out in a city such as Edinburgh, Glasgow or Dundee - it is halfway round the globe in one of the world’s fastest developing economies.
And when this 20-something gr
aduate gets to his desk at 2pm, he will find himself fielding early-morning calls from frustrated PC users across the UK.
Welcome to Bangalore - India’s fifth largest city and the new call centre capital of the world.
Already home to thousands of zealous young professionals working in IT services and outsourcing, the city has a growing population of software developers, chip designers and data analysts.
Together with similar knowledge-based workforces in sprawling cities such as Delhi and Mumbai, India is estimated to have around 350,000 people working within this rapidly-expanding sector. In the next few years, that figure is expected to pass through the one million mark.
Some of the western world’s biggest corporate names now have a presence in the subcontinent, including accountancy titan Ernst & Young, investment bank Morgan Stanley and BT. Dozens of others outsource work to local companies such as Bangalore-based IT services specialists Infosys and Wipro.
Worryingly, Deloitte Research estimates that up to 300,000 UK posts, mainly in call centres, and including 30,000 highly paid jobs, will eventually be transferred to India.
It’s easy to see the attraction for employers, though, with staff in India taking home about one-sixth of the wage of the equivalent UK employee. In many cases, the Indian workers are also credited with doing the work more efficiently than their western counterparts.
The trend of shifting work to India has triggered understandable alarm in the UK, particularly within the financial services industry.
HSBC, the world’s second-biggest bank, recently announced plans to shed about 4000 UK staff as it relocates work to India, as well as Malaysia and China, in what is understood to be one of the largest transfers of British jobs overseas.
Rivals Barclays and Lloyds TSB also plan to move jobs away from these shores. Last month, Lloyds unveiled plans to close a call centre in Newcastle, with the loss of 750 full and part-time jobs, transferring some of the work to the subcontinent. It is looking to have 1500 staff based in India by the end of next year.
Closer to home, union leaders and local politicians have expressed fears for the long-term future of thousands of jobs in the Capital after the first signs of a drift eastwards.
Life and pensions heavyweights Scottish Provident - owned by Abbey - and Scottish Widows, which is part of the Lloyds TSB Group, are launching pilot schemes involving the outsourcing of work to India.
Although Lloyds has stressed that no jobs will be lost in Edinburgh in the near future, union officials fear the move could be the thin end of the wedge. As Steve Tatlow, assistant general secretary with the Lloyds TSB Group Union, says: "You don’t spend money on a pilot if you don’t think it’s going to be a success. If you look at it purely on cost grounds, you have to assume it will be a success and the loss of hundreds, if not thousands, of jobs will follow."
Abbey is conducting a similar pilot project to transfer about 100 data processing posts at Scottish Provident from Glasgow and Edinburgh to India.
Again, there is a promise of no immediate redundancies and the group says it has been working closely with unions and employees since it made a decision to "selectively offshore" some of its administrative processes to Bangalore earlier this year.
Both of the venerable institutions employ thousands of people in the Capital, and across the country roughly one in ten Scottish jobs are dependent on the financial sector. Edinburgh North and Leith MP Mark Lazarowicz is concerned at the growing trend to transfer work halfway across the world.
He argues: "If more and more companies keep doing it, those who want to stay here will also be under pressure to move because otherwise they’ll be unable to remain competitive."
White collar union Unifi is gearing up for a showdown with some of the big UK banks over their plans to move jobs to India.
Deputy general secretary Iain MacLean says: "It is not acceptable for companies to export jobs on the grounds of cost-cutting regardless of the devastating impact on workers, families and communities."
Of course, the fad has its defenders too. McKinsey, the global management consultancy, recently published an independent report claiming that moving call centre jobs to India could be a good thing for Britain as cost savings such as cheaper banking are frequently passed on to customers here.
The argument also points to increased income in India, meaning workers there have more money to spend, part of which goes on buying imports.
Earlier this week, Trade and Industry Secretary Patricia Hewitt gave strong backing to companies that outsource their services to developing countries when she rejected union demands that the Government steps in to stop firms moving overseas.
As a result, new laws or changes to public procurement rules to discriminate against UK firms setting up call centres in India will not be introduced.
It’s not all one-way traffic either - there are still valuable IT services jobs being created in the UK. United States-based technical support specialist Absolute Quality has pledged to create 150 jobs in Glasgow over the next two years.
Business development director Campbell Cameron says: "The Indian call centres, whatever they may claim, are not able to offer high-level technical support in French, German, Spanish and Dutch. This is the type of thing we can do and these pan-European services will remain in western Europe."
However, there is fresh concern among business leaders and union officials that the range of knowledge-based activities being transferred or outsourced to India is steadily expanding. Already some drug companies are shifting their research to Asia and investment banks are moving there too. Recently it emerged that legal big-hitter Allen & Overy (A&O) was embarking upon a radical plan to outsource half of its document production department to southern India.
The move, believed to be the first of its kind by a large UK law firm, is expected to halve the head count at the firm’s London-based document production department, which currently employs about 85 staff. It follows a successful pilot scheme in August.
The US outsourcing provider Office Tiger is to establish a dedicated facility for A&O in the Indian city of Chennai, formerly known as Madras.
Steven Chernikeeff, A&O’s head of operational services, describes the move as "a paradigm shift" for any large UK legal firm. He adds: "We expect many other major law firms to embark upon similar projects in the near future."
