Sep 1, 2005

Salary increases in Asia Pacific : Hewitt Study

Hewitt Associates(NYSE: HEW), a global human resources services firm, today released preliminary results from its annual Asia Pacific Salary Increase survey, which reveals that India will be having the biggest increases in salaries (upto 14%)

Nishchae Suri, Rewards Consulting Leader, for Hewitt Associates in Asia:
"As organizations attempt to become more global and capture larger customer bases around the world, India and China continue to be strong favorites. It is expected these countries will continue to drive and significantly influence economic growth in the region. Given the global attention, salary increases in these markets are expected to be among thehighest in the region."

Does this mean that cost-competitiveness of India is about to erode for India in some of the higher value industries? Probably, but I would argue that's a good thing. Let the lower value work start moving to even lower cost countries. But there is a chance that numbers of such skilled people are too small in individual countries to benefit organizations that outsource. BPO benefits organizations by not just with the lower cost but the ability to centralize and standardize processes and have control over them. Would that be possible if work spread out to dozens of smaller countries instead of India. I think not.