The single most important factor that affects any business that thrives on outsourcing is the availability of talent. Everything else can be managed that includes putting in processes, communication & collaboration with customers, and getting your customers to understand what they need to do to make outsourcing successful.

This single factor, which is the lack of talent, that can do away with quality concerns in terms of delivering what the customer expects, is the most important criteria. For instance, if there is a star team that has been delivering day-in and day-out for a customer, and going by the trend of 15% to 25% of wage inflation, customer should be too happy to take a portion of the burden and retain their star team that would allow them to grow at a faster pace. This would ensure that the outsourcing vendor doesn’t have to take a huge hit in terms of profitability.

Hence wage inflation cannot and should not be considered a threat to outsourcing and at the same time, there has to be a way to nurture talents that can make the difference for a customer. The more you sell on the cost-arbitrage, the faster would you become unsuccessful and lose out on multiple counts. Identify the talents, nurture them and make that difference to your customers. Then they would be able to relieve you of all or most of your burdens that arise out of wage inflation and strengthening of rupee.

This was something that was troubling me and I also read the findings of the survey conducted by syntel on outsourcing concerns with fortune 1000 IT executives. 33% have come out and said that wage inflation is their biggest concern. If the right talent is made available to them, would they even be mentioning about this?