India Outsourcing BPO Costs – 2/?

I was yesterday at the dinner of the CEO forum of the MCCIA, here at Pune. The speaker of the evening was Mr Pramod Haque, Managing Partner of the VC firm of Norwest Venture Partners. He talked of his two investee companies and why they had chosen Pune as the preferred location over many other cities which they had closely examined.

But hidden in his message was the topic which is the subject matter on hand. His coverage in the Pune Newsline carries the full story. But his warning note is ‘‘India (and Pune’s) biggest advantage is its cost advantage. But if salaries don’t settle down, it will become uncompetitive versus China and Eastern Europe.’’

To regular readers of my blog this should sound familiar.

I had wanted to ask him some questions during the Q and A, but held myself back.
1. If his investee companies needed talent ( and that was the main message of the evening ) would he hire them without offering more to employees with experience. Does he expect them to switch from existing employers without a good jump?

2. If his employees were being offered a 50% hike by the competition down the street what would he do? Match the offer and hold them back? Let them go?

I have said before in many forums and I am saying this again. Unless we take collective action as a joint forum we will not be able to achieve cost control. This is so because many factors of costs are influenced by the environment external to the enterprise.