Onshoring offers bleak view of UK economy

As talk increases of a double dip recession, a growing trend in returning offshored work to the call centres of Blighty is a sign that the vultures may well be circling.

While companies once couldn’t wait to move jobs to places such as Bangalore, contracts are increasingly finding their way back to the UK as onshoring increases.

An end to talking at IT helpdesks thousands of miles away might please legions of Daily Mail readers, but it is a worrying sign of high unemployment in the UK, and a troubled economy. 

One firm, Commensus, has announced that it will be moving work back to the UK due to the ability to pay more ‘competitive rates’ at home than countries generally considered poorer by comparison.

The UK job market has become “much more competitive in the recession”, according to the company MD.

Commensus says that with the pound value on the wane, off shoring is becoming a “less lucrative proposition for companies in the UK”.

We spoke to Commensus, which then said that the decision was in fact based more on skill. When the topic of economic implications reared its ugly head, a spokeperson was reticent to broach the topic, despite a statement clearly underlining financial reasons.

While offshoring is still common, the increase of work flowing in the opposite direction has clear undertones of a weaker financial environment.

TechEye also spoke to Peter Ryan, an outsourcing expert at Ovum, who told us that there is an increase in off shore work coming home.

“It has been becoming more pervasive since around 2008 and 2009,” Ryan told us. “I have seen more examples of onshoring since then, and there is some link between a recession and a weak economy.”

He continued: “It is likely that the increase in onshoring, mainly from India, is also a response to consumer and political pressure with unemployment high. But firms looking at onshoring need to be aware that it could be a false economy in the long term.  The recession will come to an end and those looking at repatriating work will find that the price points won’t work once the economy picks up.”

However, firms appear willing to take that risk, suggesting some, at least, think the recession will be more long term than we’d like to think.