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Knowledge Process Outsourcing (KPO) Services

Human Resource Problems in Knowledge Process Outsourcing (KPO)

HR Challenges

Potentially massive savings in wage and benefit costs continue to drive the global offshoring movement, but companies are facing a wide range of people management issues both overseas and at home, according to a major study released by The Conference Board, the global research and business membership organization.


But offshoring continues to pose risks as well as opportunities. “Does cheaper also mean riskier?” the new study asks. “As labor demand rises in offshoring markets, offshorers and potential offshorers would be right to wonder how long the arbitrage opportunity will last. Will labor supply continue to meet growing demand?”


Already, increases in demand for IT skills are driving up pay levels, especially in such centers as Bangalore and New Delhi in India.


The study emphasizes that companies must look beyond wages to consider benefits, training and other costs before they outsource and also consider transportation, cultural and other expenses related to offshoring.


At home, companies are learning they can quell some of the disruption springing from offshoring by designing plans to aid employees who lose their jobs to offshoring, overcoming resistance from disgruntled workers and maintaining both morale and a positive image among remaining employees.


The study points to a number of actions that companies can take to build cooperation and sustain trust, including:

- Involve managers at all levels in important decisions.

- Foster openness and create a sense of fairness.

- Promote a culture in which people believe in their colleagues’ and leaders’ competence.

- Promote cross-cultural health, awareness, and cooperation.


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