'Backlash' will fizzle out by '04: Gartner

MUMBAI:Gartner believes that the backlash towards offshore IT service providers will have played its course by end of 2004. However, there would be a 10 percent job loss in the US by this time due to offshore outsourcing. Through 2004, despite this potential HR backlash, 80 percent of US executive boardrooms will have discussed global delivery options (nearshore and offshore). Of those, 80 percent will pursue an analysis global delivery options (nearshore and offshore) and 80 percent of those enterprises using offshore sourcing will act on this decision by increasing their level of people resources (nearshore and offshore) by 30 percent or more.

Though there is no long-term threat to Indian companies from this backlash, it is imperative that Indian companies refined their hiring model to become fully engaged local citizens in local markets, rather than all Indian companies employing predominantly Indian staff. This would be especially valid for activities like public relations, advertising and corporate communications.

Gartner also lauded the role of NASSCOM in swiftly employing a PR firm and engaging in the necessary lobbying to counter the threat of backlash in the US. However, one senior Gartner analyst advised that even this model of lobbying should be different across multiple geographies.

The current backlash follows a similar model witnessed in many other sector over the years. For example, electronics and automobiles to Japan in the late 1940s to early 1980s; semiconductors to Taiwan and Korea in the late 1970s to early 1980s; manufacturing to China in the late 1980s to early 1990s; and now an emerging shift of IT services to India, which started in the early 2000s with companies' Y2K initiatives.

(CNS)