India's outsourcers tap low-cost rural labor pool
By siliconindia   |   Wednesday, 23 June 2010, 00:03 IST   |    3 Comments
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India's outsourcers tap low-cost rural labor pool
Bangalore: Outsourcing companies in India are to set up their back-office operations in the country's small towns and villages in order to render a low-cost labor pool. The outsourcers are turning to educated people, including engineering graduates, living in rural areas, because in big cities they are facing high staff attrition rates and rising wages, reports John Ribeiro of Computerworld. According to Som Mittal, President of India's National Association of Software and Service Companies, companies are likely to break up projects and send simpler work to rural outsourcing centers. Customers are concerned with the quality of service only. In the process of setting up business in the rural areas, the companies are bringing middle-class values and modern aspirations to the tradition-bound heartland. The outsourcers are faced with high staff attrition rates and rising wages in cities such as Bangalore, so they're turning to educated people, including engineering graduates, living in rural areas. An estimated 20 centers have been set up in the hinterland in the last few years, with 180 more in small cities. Bangalore-based Rural Shores has six small-town locations, including Bagepalli, with plans for 30 by 2013 and 500 by 2017, or one in nearly every Indian district. Companies are likely to break up projects and send simpler work to rural outsourcing centers. Even the Indian government is planning to increase broadband Internet access in rural areas and that will boost the outsourcers' efforts to set up operations in small towns.

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