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India’s second wave of Covid-19 has become a test of the latest real stress in the global service industry as companies maintain back office operations amid widespread infections and a deteriorating health care system.
India is the world’s leading back-office center with nearly 4.5 million people responding to customer service calls to software development mortgage processing, ahead of members like the Philippines with more than 1.2 million employees.
Global banking and technology companies, from Goldman Sachs to Google, also conduct their own home operations there, doing much more procurement work for subcontractors such as Infosys and Tata Consultancy Services.
But the country has been dominated by a second wave of the pandemic, with an average of 260,000 infections a day and an average of 4,100 deaths a day, both of which are believed to be minimal. The humanitarian crisis has intensified severe shortage hospital beds, oxygen and vaccines.
India has become indispensable for global companies, but executives say the crisis poses risks to this model. Companies have been forced to move their work abroad, delay projects and build treatment facilities for workers.
“I think India’s second wave will have a huge impact on the industry,” said Vishal Sikka, former CEO of Infosys and Oracle, a board member of the U.S. technology company, which has 45,000 people in India.
The pandemic has already exacerbated the industry when it forced a violent national blockade sector in India last year switch to remote work almost overnight. “But now, with the break, it looks worse. It looks like it’s going to get worse,” Sikka said. “It’s just the number of people who get sick.”
Managers and analysts say many companies have reported that 10 percent of their employees work with Covid-19. This number does not include staff working to care for sick families.
Vinod AJ, general secretary of the industry group IT forums, said the burden is not being managed for many employees. “The problem is that not only them but also their families are affected,” he said. “Many companies require 24-hour support [clients in] The US and other parts of the world. They are not able to help that much. ”
Consultant Sid Pai says no business has had immunity. “Every company, regardless of size and national origin, has an impact, whether you’re at Goldman Sachs, Accenture, TCS or Infosys,” he said.
Bangalore is suffering from pandemics
Bangalore, a major technology and IT hub, has been one of the most serious cities, although the situation has shown some signs of improvement. The national load has dropped in recent days, although experts fear it is a virus spreading to certain parts of the country with less ability to test.
Arvind Krishna, IBM, CEO of a U.S. technology company with more than 100,000 employees in India, said the burden is manageable, assuming the second wave is reaching its peak.
“It’s a concern, but not a five-alarm fire,” he said. “I am more concerned about the long-term impact it will have on some families. We are recovering from several anecdotes of unrecovered people between the ages of 20 and 30. That’s a shock compared to last year. “
Kolkata Call Center, run by Avise Techno Solutions
4.5 m
Indian office staff, from customer service calls to software development
4,100
Average deaths per day in the second wave of Covid-19
% 3
Percentage of Indian population included
Pravin Rao, chief operating officer of Infosys, which employs more than 250,000 people, said India’s IT sector has suffered many storms and is well equipped to survive this.
“This industry has repeatedly shown its resilience, from the eruption of dotcom to the global financial crisis,” he said. “There’s always been talk about whether this industry will survive, in Covid’s initial wave last year.”
A highly skilled and low cost business model
It was taken as a site for outsourcing by companies in western India call centers and computer work in the 1990s.
It prompted the country’s large bases of high-skilled and low-cost workers to delegate to India a list of growing critical functions for banks and software companies. The sector generates about $ 180 billion a year, according to Nasscom India’s IT industry group.
Travel bans and closures last year he shook a business model based on sending workers abroad and sending large campuses. According to Nasscom, spending on IT services fell by 4 percent in 2020.
But the wealth-rich industry declined when business began in Europe and North America. Net sales growth accelerated from 2.7 per cent year-on-year in the quarter ended June 2020 to 6.4 per cent in the first quarter of 2021, according to the CARE Rating agency.
India’s second wave poses a more fundamental threat in the case of the government mishandling the crisis of the crisis – as the health system is prepared and not getting enough vaccines – is damaging its reputation as a reliable destination for subcontracting the country.
In the UK, for example, regulators have been consulting with lenders about the effects they may have on operations.
“It has tarnished that confidence in the resistance [companies] he thought India would deliver, “said DD Mishra Gartner, chief analyst at research and consulting firm.” The response has not given everyone a good level of comfort. “
The health crisis put pressure on employers
A special challenge is the huge burden that the second wave has had on the Indian health system, which has left it rich Indians cannot ensure treatment. This has forced the company to intervene in the issues. NatWest, the UK bank, has bought oxygen concentrators for its employees from many companies due to a severe shortage for medical use.
Filled with hospitals, Infosys and TCS have also set up their own Covid treatment facilities.
To get the operations up and running, some have even changed jobs outside of India. Shanmugam Nagarajan, founder [24]7.ai, a subcontractor for customer service, directs calls from India to other places.
“The waves hit different parts of the world at different times,” Nagarajan said. “When India is unable to take calls, the calls are being made by Colombia and the Philippines.”
Raok said the impact is limited, but Infosys is also hiring subcontractors and negotiating with customers to delay projects that are “not very critical”.
TCS said its productive staff and ability to deliver to customers was demonstrated by “how strong and effective this model is”.
Pai added that the recent breakdown would increase costs and damage productivity. “Customers have understood this so far, but at some point the economy will start up and customers will ask questions,” he said.
One of the challenges companies have tried to address is vaccines. India has changed its rules this month to allow the private sector to directly acquire owners acute shortage – The last few months have been expected – they have made it difficult to do so.
Apparao VV, head of human resources at HCL, a Delhi-based subcontractor, said the company has been able to secure a limited number of vaccines through a partnership with a private hospital, but is working to get more.
“No one is able to provide the necessary timelines and volumes,” he said. “We approached all the manufacturers. They were very uncompromising. . . We are not able to make commitments through any sources. “
About 3% of India’s population is fully integrated, with over 30 per cent of the US.
One advantage can surpass all others: people
Because of all the ups and downs, executives say India’s biggest long-term advantage is that it believes the pandemic could last: its workforce.
With fierce competition from programmers and software engineers around the world, companies elsewhere can find so many employees at the right price.
JPMorgan and Credit Suisse, which already have large operations in the country, have announced that they plan to hire between 4,000 and 1,000 more Indian employees in 2021 this month to boost their technology by 2021.
“Companies will go where talent is,” said Sangeeta Gupta, Nasscom’s senior vice president.
Additional report by Nicholas Megaw in London
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