Gentle, who was speaking at a London conference on outsourcing hosted by law firm Latham & Watkins, said that savings from moving back-office operations to offshore countries would amount to 39% or $138bn in total. This would serve to cut the total cost base of the top financial services firms to $218bn.
Regarding job migration, Deloitte’s research claims that 850,000 jobs will migrate from North America, while 730,000 will migrate from Europe. However, the migration will not only from be from west to east. Asian countries will also lose about 400,000 jobs to offshore countries as multi-nationals centralize their back-office operations.
India’s dominance in the offshore market is likely to continue for several years, according to Deloitte’s research. Gentle said that although there are several countries beginning to compete for offshore business, the combination of abundant skills and low costs will keep India in the lead for a while.
Although there is pressure on Indian IT staff wages to increase, the growing competition in the market would keep it under control. Gentle even went as far as to say he did not believe Indian IT staff wages would reach parity with Western salaries until 2020.
This article is based on material originally published by ComputerWire
