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5.28.2007

CURRENCY APPRECIATION AND THE COMPETITIVENESS OF ASIAN BPO FIRMS

Further to the prevailing currency issues, BPO.Asia reported today that Asian BPO firms are a bit nervous due to the continuous rise in the value of Asian currencies. The BPO industry is currently being dominated by Asian countries led by India but European and other countries are also trying to get a bigger slice of the action.

In the long run, the forex movements of the currencies of countries that hosts BPO firms will largely determine its competitiveness in the outsourcing world.

My appreciation/devaluation solution is simple. If salaries comprise a large portion of every BPO firms cost structure, why not base it, for the most part on performance? Another solution will be to pay the wages in the currency of the company’s contract with the clients. The solution is very fair and will keep the companies largely competitive.

Whoever follows this formula, will surely win the race.. :-)

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