Growth in off-shoring may put pressure on wages

Off-shoring is not without its risks and costs to financial institutions...Explosive growth in off-shoring may put pressure on wages and other costs in countries such as India, the recently-released WTO report on trade in a globalised world said.        

According to the WTO, closely connected to rising labour costs are high turnover rates, which can affect the quality of off-shore operations and these issues can halt the further expansion of off-shoring.        

 

Citing the example of the risk of a political backlash at home because of domestic job losses, the report said, in the US, a number of bills at both state and federal levels have been proposed to place restrictions on off-shoring practices.        

This is a risk that is not unique to financial institutions but one common to all firms that off-shore a part of their operations abroad, the report said.