Potential being wasted
Has Pakistan lost the race for outsourcing?
By Rahilla Zafar
When you read about the countries benefiting from call center jobs, Pakistan is often missing from the list. According to Kiran Karnik, president of NASSCOM, an Indian non-profit organisation that represents more than 800 IT companies and BPO providers, the average salary of a call center worker in India is two and a half times what a fresh college graduate could receive elsewhere. It is also five times more than India’s per capita income. With a 95% literacy rate and government backing through tax incentives, the Philippines is also benefiting from the jobs provided by the call center industry.
After investing in a public training programme to prepare residents for call center work and liberalising the telecommunications industry allowing for more satellite connections overseas, Jamaica has successfully moved beyond having just a tourism-driven economy. Jamaica now boasts over thirteen call centers providing its people thousands of jobs. With a literacy rate of 89% for women and 94% for men and some of the best infrastructures in the region, Sri Lanka has emerged as a major player in attracting call center industry investment also. After pressure was put on the Sri Lankan Government, it vastly improved technical training and extended high-speed connectivity. These measures have paid off, as the call center industry costs in Sri Lanka are estimated to be 20-40% lower compared to India.
How does Pakistan match up to India? According to Farrukh Aslam, vice president of US-based Touchstone Communications, as of now the costs are 40% higher to open a call center per seat in Pakistan than India. He says, “The government could do a lot more but it is not sincere to the cause. The infrastructure in Pakistan does not match the requirements of a Fortune 500 company. If you invest nothing in your people, you get nothing back in return. The government needs to do a lot more, for example invest in human capital, the workforce, offer incentives and help improve Pakistan’s international image of being a politically unstable country.”
According to Mike Jackson, CEO of Traction Call Center Management Group, which designs and operates call centers in both India and Pakistan, “India is literally light years ahead of Pakistan right now. The people of India have been doing this for eight years now and some of the companies are madly successful. This makes a very strong investment climate. The Government of India has also assisted in many ways to develop the industry. India has built infrastructure and trained staff. Pakistan has a strong will to succeed and lots of ready cash to finance but the minds are also more closed to outside assistance.”
On how Pakistan has lagged so far behind, Aslam says, “The silent revolution in India and the Philippines shocked people in Pakistan. People who follow one path and do not change are the losers and eventually they phase out. Ten years ago, there was no Internet; the past five to six years have been the best thing to happen to mankind this century. But the people of Pakistan for the most part only know the Internet as a tool for viewing pornography, on-line chatting and email. They do not know what customer data, CSR, MSR, on-line financial analysts, transport phone call, or what voice Internet protocol is. These are major technological revolutions since the day of Graham Bell and his invention of the telephone.”
Unlike Pakistan, India took advantage of all this. Aslam adds, “India has taken off; it’s a slap in the face and this country has nobody to blame for it but themselves. The government over the years has restricted English language education to the elite, politicians, bureaucrats, army, and the military. The children of these elites are not the type of kids growing up needing to get middle class jobs.”
Another major issue is the false perception of the IT profession many Pakistani youth have. “It has become sub-standard; there are no jobs in it anymore; even in India, it is over-saturated,” says Aslam. Speaking of the thousands of young Pakistanis who are still pursuing computer science degrees, Aslam says, “the message has not gotten out to the Pakistani youth who are still flocking to these computer schools. The schools are making money off this and ripping off the general public.”
According to Aslam, “Pakistan will never catch up to India, and all people here can do is learn from them.” There are more Microsoft certified engineers in India than anywhere else in the world. China took over the manufacturing industry and India has taken over the service industry. India earns more dollars per employee from Western countries then China does from manufacturing and producing.
Aslam adds, “Unlike Pakistan, India has a vision, the people have a vision, they don’t have to defend their country’s image.” India has joined Australia in getting companies such as IBM, Volvo, and BMW to replace their high-dollar US consultants with their local skilled labour force. Presidential candidate John Kerry has promised to stop out-sourcing if elected but according to most industry insiders, he will not be able to legally. In fact, all the US would be able to do is prevent government and government-contracted jobs from going overseas.
Without a doubt, the people of Pakistan missed out on an opportunity many countries took advantage of. Aslam says, “There is no awareness, the media must play a role to put pressure on the government who are incompetent and have no clue that this industry even exists in Pakistan. There are many politicians but no leaders.”
Another drawback is that Pakistan has poor public transportation, low literacy (estimated at only 49%), no sexual harassment laws, and negative perceptions of women in the workforce. Currently, Aslam says, 20% of his work force are women who he claims always outperform men. Unfortunately, even though Touchstone provides door to door pick up and offers a starting salary of fifteen to eighteen thousand rupees a month for forty hours a week of work, many women end up quitting due to societal pressure. In India, the call center work force ratio is 50/50. Once hired at Touchstone, employees go through three-week training in communication skills, product knowledge, and accent neutralisation. Since the call center industry is continuing to grow in Pakistan, if one performs well, career growth is expected.
According to Karnik, India’s single-biggest comparative advantage is the scalability of the country’s talent pool. A call center with 500 employees can be set up anywhere in the world. However, India is the only developing country that could expand a center of 500 into 1,000 employees within months. Within two years, India would have no problems expanding to 5,000 employees because they have such a large educated work force.
According to Aslam and Jackson, another challenge Pakistan faces is lack of middle management. Another advantage India has in being in this industry for years is that “In India you have seasoned CEOs to agents available with up to eight to nine years of experience,” says Jackson.
However, Pakistan has not lost out completely. According to Jackson, “The size of the pie is billions, even if Pakistan can capture a small piece, it is still very large. If the geo-political situation remains stable Pakistan has the potential to receive more blue chip clients. The main advantage Pakistan has right now is that it is still an untapped market. It needs to position itself quickly to move ahead.”
Both Aslam and Jackson are confident that once more blue chip companies decide to invest in Pakistan, it would be a domino affect of many other companies following. However, like Jamaica, India, Sri Lanka, and the Philippines, the Government of Pakistan must do what it can to support this industry. This must be done primarily through improved infrastructure, education, and technical training.