Cross-shoring: Are Americans taking Indian jobs?

In a reversal of longstanding trends, Indian outsourcing companies are beginning to hire American workers instead of bringing Indian workers to the US via expensive and scarce H-1B visas .

It’s a story that’s been told and retold a lot lately (the Financial Times wrote about this phenomenon last year), but the trend got another bump from the Washington Post, which reported recently from a New York City call centre run by Aegis Communications, a subsidiary of India’s Essar Group.

According to the Post, Aegis has 5,000 US employees-90% of whom are American-and it plans to triple that number. The company also plans to send US employees to work in Bangalore and Goa.

Although Aegis is a bit of an outlier, Indian outsourcing companies have become increasingly interested in hiring American workers because it helps them “improve their image and expand their U.S. businesses by taking over companies and hiring more U.S. talent,” according to the Post.

[caption id=“attachment_14440” align=“alignright” width=“300” caption=“A few Indian outsourcing companies are now beginning to move jobs - to the US! Finbarr O’Reilly/Reuters”] [/caption]

Also, high rates of unemployment stateside have given Indian companies like Aegis an opportunity.

And global competition figures into the trend, too. American companies, for their part, are hiring more in India, which has increased local wages. This, in turn, has led Indian firms like Infosys and Tata Consultancy Services to look to the US for employees.

Some clients of Indian outsourcing firms say they have seen a business benefit to this trend. For example, the Post reports that one New York textile company outsources its work via Gurgaon-based Genpact, and while it uses Indian accountants, it also pays more in wages to hire US-based Genpact employees for accounts receivables work because “he’s heard from executives at other companies that the quality of work in India is slipping as turnover increases and Indian companies invest less in training, especially if a client isn’t willing to pay higher wages over time.” (US companies are also hesitant to send consumer data overseas, while others are “tired of poor service, accents and crackling phone lines,” according to the Post.)

But the unfavourable perceptions come from both sides. According to the Post article, Indian managers are puzzled about why the US workers are less educated than their Indian colleagues, and some think that American workers can be lazy.