I frequently speak to people in India that run BPO or software firms and I am always astonished by the numbers. People tell me that they started their software company 5 years back and employ 2000 people today. In Management Team, a famous Dutch magazine, I just read an article about Intelenet. This Business Process Outsourcing (BPO) company, started 10 years back with 40 employees and today has 42,000 employees. The biggest part of the work that is moved to India comes from the US. So they are doing something different from us.
The Indian companies can grow with such speed, because the people are available. Infosys has started 25 years back with 10 people and employs over 100.000 people today. Such stories wouldn’t be possible in Europe. But the work also needs to come in. Apparently, the US outsources much more than we Europeans. In the Netherlands, if we talk about a big software firm, we are talking about 100 people. In the outsourcing industry, a big firm in Eastern Europe doesn’t employ much more than 1000 people. So what are the Americans doing different?
- One obvious reason has to do with language. They can employ people in India to do a vast amount of work as they speak the same language.
- It may also have to do with the opportunist mindset of Americans? When they see a business opportunity, they take it. Are we Europeans too conservative?
- Does it have to do with money? I think that the salaries in Western Europe are at the same level or higher than in the US, so I can hardly imagine that there isn’t enough incentive for us.
- Availability of people? In the US, unemployment rates are towards 10%, while in many Northern European countries, they are around 5%.
Dear readers, it would be interesting to learn some perspectives of Americans and Europeans. What do you believe are the differences in our actions?
In part mindset, and in part legal and HR environment. In Europe, it’s not as easy to lay those people off that you want to replace through a BPO provider. Many companies in the US have so-called “at will” employment contracts, which allow both sides to terminate the contract more or less immediately – usually with 2-week notice. Yes, severance may be paid, but still, the change can be implemented faster, which gives a larger ROI and larger incentive to grow BPO agreements faster.
I believe that it is in the mindset and the willingness to take risks. We in Europe has fallen back into some slumbering state since several hundred years back and have to wake up from that to do something about the situation. And I also think it has to do with the fact that we educate our children to be workers and not entrepreneurs with a burning desire to create and evolve. Then there are so many more venture opportunists in the United States and not to mention the risk founding and wealth that are actually there, and the lack of that in Europe as a general.