Greater efforts needed to ensure outsourcing creates decent work – UN labour agency

13 July 2010

The offshoring and outsourcing of business services from developed to developing countries is creating good jobs by local standards, but the industry still has to work on achieving full decent work, says the United Nations labour agency.

A new book by the International Labour Organization (ILO) provides the first in-depth study of the workplace in the Business Process Outsourcing (BPO) industry, using case studies in four major “destination” countries – Argentina, Brazil, India and the Philippines.

The BPO industry, which can broadly be divided into “voice” services, such as call/contact centres, and “back office” services, like finance and accounting, data processing and management, and human resource development, is a rapidly growing industry worth some $90 billion.

“A lot has been written about this phenomenon and its implications for economic growth and employment. However, very little is known about the working conditions in the BPO industry,” says Jon Messenger, Senior Researcher with the Conditions of Work and Employment Programme of the ILO and co-editor of the study with Naj Ghosheh.

The book, entitled “Offshoring and Working Conditions in Remote Work,” examines remote work, its impact on the labour market in general and the workforce in particular, and the possible implications for working and employment conditions in countries where the BPO industry is growing.

The ILO found a mixed picture of the working conditions in the four countries examined. “On the positive side, and unlike previous assumptions, remote work jobs are of a reasonable good quality by local standards,” Mr. Messenger notes.

For example, wages of Indian BPO workers are nearly double the average wages in other sectors of the Indian economy. In the Philippines, BPO employees earn 53 per cent more than workers of the same age in other industries.

At the same time, night work is common to serve customers in distant time zones in ‘real time’ and work is generally stressful. The BPO industry also has a high staff turnover rate, which in some companies can reach as high as 100 per cent or more annually.

“Back office” positions, meanwhile, tend to be of higher quality than call centre positions in terms of their wages and other working conditions. Workers serving outside markets also appear to have better quality jobs than those focused on domestic markets, mainly as a result of the higher skills required in international positions.

The book offers several suggestions for government policies and company practices that could further improve the quality of jobs in the BPO industry and increase productivity, including stronger measures to protect the health and safety of night workers, in line with the ILO Night Work Convention.

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