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BUSINESS ENGLISH · BUSINESS ISSUES · INTERMEDIATE (B1-B2)

MIXED
SIGNALS FOR
OUTSOURCING
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1 Warm-up

What is outsourcing? What kinds of services do companies outsource? Which regions of the world
are well-known for providing outsourcing services for companies in the West?

2 Key words

Match the following words with their definitions:

1. resemble a. a general, continuous increase in prices

2. inflation b. how often employees leave a company and are replaced by new
people
3. overheads c. the regular, general costs of running a business, e.g. rent, heating,
electricity
4. essential d. the way in which people are composed according to their genes

5. genetic make-up e. to look like or be like (something/someone)

6. staff turnover f. very important

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INTERMEDIATE (B1-B2)

MIXED SIGNALS FOR OUTSOURCING

3 Reading

Read the article on the Indian outsourcing industry and answer the following questions:

1. What is the main reason why some companies want to close down their outsourcing operations
in India?

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2. What is ‘reverse outsourcing’?

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3. What is the cause of the rising strength of India’s currency?

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4. How do MindTree Consulting intend to reduce their costs?

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5. Why is the Indian outsourcing industry still growing despite wage increases?

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6. In which sector is there a sharp growth in wages?

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7. In which sector are Indian wages much lower than in the West?

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8. Which human resources problem do Indian call centre operations have to deal with?

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9. What outside threat is the Indian outsourcing industry facing?

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10. What characteristic of Indian people gives the Indian outsourcing industry a competitive advantage,
according to the chief executive of MindTree’s IT Services?

.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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INTERMEDIATE (B1-B2)
MIXED SIGNALS FOR OUTSOURCING
Mixed signals for outsourcing
Wages in the Indian IT sector are starting to resemble those in the West. Some companies are bringing
the jobs back home.
1.
There have been confusing messages in recent weeks
which suggest that the outsourcing boom in India
has reached a peak and that the financial benefits of
outsourcing work to the country may be coming to
an end.
2.
The search engine company Like.com recently
announced it was closing its Indian engineering
site and transferring jobs back to the US because
wages in Bangalore had simply become too high. The
company’s chief executive Mr Shah said, "Bangalore
wages have been growing like crazy." Just before the
announcement, one of his Bangalore engineers could
earn 75 per cent of the US salary. Two years earlier,
the same engineer had been earning 20 per cent of
the American salary.
3.
In Britain, the Indian government estimates that there
are 5,000 jobs that have been created by ‘reverse
outsourcing’ or inward investment from India. All are
in e-commerce and software. One comedian made a
joke about middle-class Indians from Bombay dialling
a call centre in Scotland to book a train ticket to Delhi
(and complaining that they cannot understand the
Scottish accent). When will this joke become reality?
4.
Wage inflation - together with the rising strength
of the Indian rupee caused by an economic growth
rate of 9 per cent - is certainly changing the way
that Indian IT companies think about doing business
and how to present their services. It is no longer
possible to only provide a service to Western clients
that is simply cheaper, according to Krishnakumar
Natarajan, the president of IT Services for MindTree
Consulting, an international IT consulting company
headquartered in Bangalore. Quality and expertise
have become essential now. "A key challenge is that
costs keep going up," he said. He said that one
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solution was to reduce overheads by concentrating
people and operations, something that is easier for
larger companies.
5.
Industry bodies are certainly confident about the
future, despite rising salaries and property costs.
The National Association of Software and Service
Companies (Nasscom) reported recently that the
industry grew by 30.7 per cent in the last financial
year and that revenues increased to just under
$40bn.
6.
So how is the industry managing this? Partly it is the
result of remaining price competitive. Despite the
headlines and the talk of rising salaries, wages here
remain considerably lower - especially for entry-level
employees - than in the US. In India, starting salaries
in the IT industry begin at about $10,000, about one-
sixth of the equivalent salary in the US.
7.
In addition, the sharp growth in Indian wages has
been mostly limited to the IT sector. In other
areas such as call centre operations, wages are still
considerably lower than in the West. One challenge
that companies are having to deal with in these areas,
however, is the high staff turnover. And another
threat India faces is from international competition,
mainly from its neighbour and strategic and economic
rival, China, but also from new outsourcing centres
such as Russia and Dubai and even Egypt.
8.
Mr Natarajan and others remain confident that India
will be able to deal with such challenges. He even said
that there may be something in the genetic make-up
of his country’s citizens that gives them an advantage
over their rivals. "Indians tend to be very good at
serving people. We are service-orientated," he said.
Adapted from The Independent, 17 July 2007
3/5
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INTERMEDIATE (B1-B2)

MIXED SIGNALS FOR OUTSOURCING

4 Find the words

Find the words and phrases in the text which mean..

1. a period of sudden economic growth (noun, P1)

2. finishing (phrase, P1)
3. a high level of skill or knowledge (noun, P4)
4. the important pieces of news on television, radio and in the press (plural noun, P6)
5. workers at the lowest level because they are new and inexperienced (adjective + noun, P6)
6. competitors (noun, P8)

5 Talking point

Does your company outsource any work? In your opinion or experience, what are the advantages
and disadvantages of outsourcing?

6 Grammar - Present perfect, Past perfect

Find the following sentences in the text and answer the questions below. Study the context of the
sentences carefully when answering questions 1-3.

a. Two years earlier, the same engineer had been earning 20 per cent of the American salary.
(P2)
b. Bangalore wages have been growing like crazy. (P2)
c. Wages in Bangalore had simply become too high. (P2)
d. Quality and expertise have become essential now. (P4)

1. What does ‘two years earlier’ mean in sentence a? Two years before the present time or two years
before a time in the past?
2. Which two sentences refer to a past action that continues up to the present?
3. Which two sentences refer to a past action that happened before or continued up to another past
action or time?
4. Which two sentences refer to ongoing actions?
5. Which two sentences refer to completed actions?
6. Match the sentences with the tense: present perfect simple, present perfect continuous, past
perfect simple, past perfect continuous
7. Find two other examples of the present perfect simple in Paragraph 1 and explain why the tense
is used.

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MIXED SIGNALS FOR OUTSOURCING

7 Grammar practice

Complete the following sentences with the present perfect or past perfect form of the verbs in
brackets:
1. At the moment, property prices are extremely high. They (grow) rapidly over the
last few years.
2. Alan graduated from university in 2001. He (study) management for four years.
3. Angela knows her company’s business really well. She (work) in three different
departments.
4. Yoshi wasn’t prepared for his English lesson because he (not/do) his homework.
5. How long (you/work) for your present employer?
6. John (live) in Dublin for ten years when he decided to move to London.
7. I (not/see) you for ages! How are you?
8. I was late for the meeting this morning. I (be) stuck in traffic for almost half an
hour.
9. By 8 o’clock this morning I (eat) breakfast and (take) a shower, so I
was ready to leave for work.
10. Xavier looks pretty tired. He (interview) candidates for the new secretary position
all day.

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TEACHER MATERIALS · INTERMEDIATE (B1-B2)

MIXED SIGNALS FOR OUTSOURCING

Key

1. Warm-up

Outsourcing is when a company pays another company to carry out part of its work usually in order to reduce
costs. Typical outsourced services include IT programming, telemarketing and customer service. Well-known
outsourcing centres include India, China, Russia and East Europe.

2. Key words

1. e 2. a 3. c 4. f 5. d 6. b

3. Reading

1. Indian wages are increasing.

2. when outsourcing jobs are created in countries in the West for companies based in traditional outsourcing
regions such as India
3. an economic growth of 9%
4. by concentrating people and operations
5. because wages still remain considerably lower than in the West, especially for entry-level employees
6. the IT sector
7. call centre operations
8. high staff turnover
9. international competition, mainly from China
10. They are service-oriented by nature.

4. Find the words

1. boom 2. coming to an end 3. expertise

4. headlines 5. entry-level employees 6. rivals

6. Grammar - Present perfect, Past perfect

1. two years before a time in the past 2. b and d

3. a and c 4. a and b
5. c and d 6. a: past perfect continuous, b: present perfect
continuous, c: past perfect simple, d: present perfect
simple
7. 1- There have been confusing messages in recent
weeks; 2- ... the outsourcing boom in India has reached
a peak. The present perfect simple refers to two
completed actions/situations which began in the past
and continued to the present.

7. Grammar practice

1. have been growing 2. had studied

3. has worked 4. hadn’t done

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TEACHER MATERIALS · INTERMEDIATE (B1-B2)

MIXED SIGNALS FOR OUTSOURCING

5. have you been working 6. had been living

7. haven’t seen 8. had been
9. had eaten; had taken 10. has been interviewing

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