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Women in Outsourcing

Author: Gretel Digo

Posted: March 27, 2015

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More than 50 percent of the world's population is made up of women, but their contribution in the workplace and global economic growth remains under-represented.  According to the International Monetary Fund Staff Discussion Note study Women, Work, and the Economy: Macroeconomic Gains from Gender Equity, men continue to lead in terms of labor force participation, while women do the majority of unpaid work.  The number of women entrepreneurs and those in senior management positions also remain low, and labor market issues continue to restrict women's options for paid work.  Part of the reason is a global market that remains divided along gender lines.  Although there has been significant progress in the last 100 years, women's participation in the labor market could be greatly improved.

Women in the Workforce: History & Workplace Changes in the Past Decades

Historically, women have been stereotyped as weaker than men, and this belief continued to resonate in the modern workplace.  The primary role of the female was seen as a caregiver and the male was considered the provider.  Companies once hired women only before they reached marriageable age and fired them when they got married.  Forty percent of single women had jobs in 1900, while only five percent of married women were employed (In pursuit of equity: Women, men, and the quest for economic citizenship in 20th-century America by Kessler-Harris 2001).

Women college graduates of 1900 and 1920 also had to choose between family and career (The meaning of college in the lives of American women by C.D.  Goldin, 1992).  Teaching was one of the few professions open to women in the 1900s to 1930s, but married women were excluded.  Female teachers who wished to have a career in education during this period were thus prevented from having families, and the few women teachers who were successful in combining career and family taught only later in life and for short periods (Career or family? Choices and constraints facing Radcliffe College graduates by J.A.  Preston, 2003).

The shortage of men in World War II started to open up opportunities for women in the workforce.  Both single and married women were recruited for work suitable only for men, and teachers with or without children were able to teach when the male teachers went to war.  However, women were forced to leave factories when the war ended, and their jobs were given to returning soldiers.  The female "nurturer" myth was reborn and allowed companies to fire pregnant women as well as preventing women with young children from seeking work (Unbending gender: Why family and work conflict and what to do about it by J.  Williams, 2000). 

In the 1970s, male wages started to flat line, making way for more women to enter the workplace.  Women started to work in areas previously dominated by men, and even mothers with young children entered the labor force.  By the year 2000, there was a significant increase in the number of two-income families or dual-earner couples, with 40 percent of wives earning higher salaries equal to or larger than their husbands'.

Modern Trends

Today, more women than men receive bachelor's and master's degrees.  According to The First Measured Century by Caplow, Hicks & Wattenberg, the number of women getting doctorate degrees are also approaching that of men.  One third or incoming MBA students and half of law and medicine incoming classes are women (University of Michigan Business School & Center for the Education of Women, 2000).  Due to decreased fertility rates and longer life spans, activities outside of child-rearing and child-bearing are also taking up a larger percentage of a woman's life, allowing women to pursue careers full-time and until retirement. 

A 2013 Pew Research Center survey and census data analysis found that young women (25 to 32 years old) today are better educated than their male counterparts and are making more money compared to men their age due to rising wages of women and falling earnings of men.  However, young women are more likely to say than young men that they do the same job and get paid less.  The survey also found that women are more likely than men to say that change is needed to achieve gender equality in the workplace.  Like men, women want job security, but women are more likely to say that being a working parent makes career advancement more difficult. 

Women in Outsourcing: IT Outsourcing, Call Centers, Outsourced Accounting & Other BPO Jobs

Companies in the United States and Europe have been outsourcing manufacturing for decades, but it was in the late 1990s when tech firms were preparing their information systems for the Y2K threat that offshore outsourcing as we know it today took off.  Due to a unique mix of information technology expertise and a very large talent pool, India became the primary destination for offshore services during this time.  India continues to lead the world today in IT and business process outsourcing, followed by the Philippines, Poland, China, Costa Rica, Ireland, Czech Republic and many countries in the Asia-Pacific region (Tholons 2015 Top 100 Outsourcing Destinations). 

India BPO

Parallel to the steadily eroding myth in the West that women are the center of home and family, workplaces in India, the Philippines and other emerging economies have undergone similar transformations.  According to a Nasscom India study, women account for about 50 percent of the business process outsourcing workforce in urban areas in India, while women working on night shift in the BPO sector constitute over 40 percent of the total workforce. 

However, despite the major economic contribution by women to the Indian BPO industry, there are many challenges that can undermine the progression of gender equality in the workplace.  According to the CEO of Indian home portal Sitagita.com, communication and self-expression are key challenges for women in the country's BPO sector.  Women at junior levels often fail to speak up against issues like lack of safety measures in the workplace and graveyard shift work. 

Female BPO workers do not feel 100% safe despite considerable improvements like company pick-up and drop-off vehicles, hotlines and SMS services that monitor commuting employees, and background checks on taxi drivers.  Issues also arise when a female BPO worker gets married.  Instead of taking a leave of absence, women are often forced to quit their jobs because of pressure from her husband and family members.  A Mercer and Nasscom survey on gender inclusivity in India's IT-BPO sector showed that besides safety concerns, female workers struggle with flexible working hours and policy on leaves and absences. 

The study also revealed that companies wishing to attract and retain female BPO talents should have anti-harassment policies in place, healthcare and awareness programs, women's recreational activities and family days.  The Assocham Social Development Foundation (ASDF) suggested that the Indian government should make it mandatory for companies to install GPS in cabs and CCTVs in the workplace, and introduce self-defense training classes and efficient systems to address complaints by female employees. 

Philippines Outsourcing

The Philippines' BPO sector has grown exponentially in the last decade, with a projected $25 billion revenue target and a 1.3 million employment target by 2016 (IT and Business Process Association of the Philippines).  Call center and back office services (finance and accounting, data entry, medical transcription, IT) remain the biggest service segments, accounting for 70 percent of BPO revenues.  BPO companies are concentrated in urban areas like Manila and Cebu, and the main market is the United States (Philippines IT-BPO Investor Primer, IBPAP 2012).

The BPO sector accounts for only about 1.7 percent of the Philippines' total employment, but it remains a key source of jobs for college-educated women in the country.  In 2008, women accounted for 55 percent of all BPO workers.  About 80 percent of women employed by BPO companies have degrees in the social sciences, engineering, and business (Gender Equality in the Labor Market in the Philippines, Asian Development Bank). 

Impact Sourcing and Women Workers

Impact sourcing is the employment of disadvantaged but high-potential people in web-based or BPO jobs.  Because work in the BPO industry has the potential to raise the standard of living of disadvantaged communities, some companies are providing work to the world's poorest citizens in low-employment areas.  According to the co-founder and chief development officer of Digital Divide Data (DDD), an impact souring company that provides content services to high-profile clients like Harvard and Stanford, there are more than 24 BPO companies in Bangladesh, Cambodia, Ghana, Haiti, Kenya and Pakistan that hire disadvantaged workers to deliver services to global clients.  Organizations like DDD can help expand opportunities for low-income women to gain better skills and get the career they want in locations were education and jobs in the IT industry are very limited.

The growth of global business process outsourcing is furthering employment opportunities for women all over the world.  To maintain this positive trajectory, governments must ensure that women have the necessary skills for BPO jobs, introduce initiatives that make it easier for women to be employed in areas previously dominated by men (e.g.  information technology), improve safety and working conditions especially for night-shift female workers, and analyze reasons for pay differentials between men and women in these sectors.

Outsourcing Industry: Benefits for Women

Business process outsourcing is a growing sector of the global economy, presenting expanded employment opportunities for women and increasing the demands made on them.  The impact of outsourcing on women is shown clearly in emerging markets and top BPO destinations India and the Philippines, where the sector has generated new income and entrepreneurship opportunities especially for well-educated women.

Despite the challenges, the IT-BPO industries in India and the Philippines are noted for extremely high diversity in terms of gender.  Above all other factors, workers are hired based on talent, allowing highly-educated women to assume a wide range of positions in the industry.

Improved Income

Global impact sourcing alone is projected to reach $20 billion in revenues by 2015 ($10 billion of which will be the direct income for 780,000 people) and employ 2.9 million people by 2020 (Avasant).  The Monitor Group (2011) suggested that employees in data entry and conversion, content management, transcription, call center services, digital publishing and other BPO segments will increase their income from between 40 percent up to 200 percent. 

New Skills Acquisition

Employment in call centers and BPO firms help women acquire new hard and soft skills, not only improving their product knowledge and technical proficiency, but also their assertiveness, communication, listening and interpersonal skills (Health, Social and Psychological Problems of Women Employees in Business Process Outsourcing: A Study in India by Amrita Gupta).

Empowerment

Relatively high wages and benefits provided by BPO firms allow female workers to gain more autonomy and freedom, empowering them.  Well-educated women working in call centers gain knowledge and experience from both their local environment and the West, making them better equipped to be global employees.  For example, some Indian women work in call centers not only to support their family but also to advance their education and do work that they truly want (Can Career-Minded Young Women Reverse Gender Discrimination? A View from Bangalore's High-Tech Sector by Clark and Sekher, 2007).

Increased Investment in Healthcare

Thanks to higher wages and female-friendly policies, the BPO industry is helping women invest more in health and wellness.  Many Indian companies provide generous maternity benefits and 24/7 childcare for their female employees (How Outsourcing is Boosting Prospects for Indian Women, CNET 2012). 

Changing Perceptions of Female Roles and Abilities

In India, parents traditionally have enormous influence over their daughters' career choices.  With the growth of the IT-BPO sector, middle-class parents are becoming comfortable with their daughters working in graveyard shifts or travelling for business.

Greater Participation in the Male-Dominated Outsourced IT Segment

Information technology is a male-dominated segment, but the global expansion of IT and BPO has opened up new avenues for women workers.  The IT-BPO outsourcing industry in India and the Philippines is a meritocracy that favors skills and talent above gender, allowing highly-skilled, educated women to hold positions in an environment previously open only to men.  The promise of higher wages and female-oriented benefits can encourage women who are still in school to major in IT and software degrees to further improve their employability. 

Nasscom India estimated that women made up 20 to 25 percent of science and engineering graduates in the country.  In 2008, women accounted for 28 percent of the country's overall IT workforce, a relatively higher proportion compared to other sectors of the economy.  Gender equality in the Indian workplace has spread to rural areas and small towns as well, where IT-BPO jobs are giving disadvantaged women better earning opportunities and ways to learn new skills and knowledge-based services.

Improved communications technology is breaking down barriers to women's economic advancement.  Women can now engage in electronic activities like e-commerce, e-government, and e-learning, and without the need for face-to-face interaction with men, especially in areas where the practice is discouraged.

Case Studies & Examples in BPO: Opportunities for Growth and Self-Reliance

Employment for Women in India's Rural BPOs

According to industry estimates, women make up about half of the BPO workforce in urban areas in India, but the percentage is even higher in rural BPOs.  An article published by the Times of India found that some rural business process outsourcing firms hire more women than men.  The BPOs reported that over 60 percent and sometimes even 100 percent of their employees are women.

Women are just as good as men in terms of skills and understanding a task, and they are more likely than men to stay in a job for the sake of loyalty, said the HR manager of rural BPO firm Desicrew Solutions.  The employees of Desicrew Solutions are 80 percent women, housed in seven offices in the villages of Tamil Nadu and two centers for women in the area.

Sometimes, necessity drives rural BPOs to operate all-women facilities.  The CEO of JSoft Solutions said that many fathers do not want to have their daughters working with men, and the social stigma of seeing a boy and girl together is so pervasive that they had no choice but to hire only female employees.

Vintes is another rural BPO operating in Kerala that has an all-female workforce.  The Vintes director explained that young men in rural areas are better equipped to go to cities and seek better paying jobs, while young women, including those who are educated, often stay behind in the villages due to family and societal pressures. 

The surge in employment of women in rural BPOs is also driven by better entrance test scores in women compared to men.  HDFC Bank gave the same test to men and women applying for jobs, and the women were more successful.  Today, 75 out of 125 employees in HDFC's captive BPO in Andhra Pradesh are women. 

JSW Steel: Improving Living Standards of Women in Vidyanagar

Women in rural India face many challenges: lack of access to education, lack of employment opportunities, early marriage, and family responsibilities.  JSW Steel helped improve rural women's economic status and raise their standard of living by establishing BPO operations in Vidyanagar, an emerging industrial complex.  JSW set up a center to train over 1,000 female high school graduates in the area.  The women were also given a stipend and transportation allowance for six months.  Currently, 150 women are hired as business associates, while others have found jobs in JSW steel and other companies.  Due to skills-based employment opportunities, JSW also helped reduce migration to other areas and retain skilled workers for new industries in the region.

Political and Capital Empowerment of Women in Kerala

In 1999, the government of Kerala State in India started outsourcing IT services, data entry and digitization, and PC assembly and maintenance to cooperatives made up of below-poverty-line women.  In the study called Social Outsourcing as a Development Tool, published in 2009 by the University of Manchester, the women described their empowerment in terms of improved self-identity, self-confidence, and status.  They were more confident when dealing with other people and approaching institutions.  Other members of the community also approached them with IT-related questions and questions on how to set up a business.  Ten percent of the respondents reported that they were more involved in politics, and a similar proportion of women said that the project increased their participation in social functions.  These women were also responsible for hiring and managing male employees, breaking away from traditional female goals of static security. 

Economic Diversification for Women in Saudi Arabia

Saudi Arabia's firs all-female business process outsourcing center opened in 2014, giving local women employment opportunities in HR, finance and accounting, materials supply, and back office services.  In a country where the unemployment rate among women is 34 percent in 2013, the center's opening is good news to female graduates.  The center's inauguration will boost Saudi Arabia's competitiveness in the outsourcing sector, and more important, create jobs for skilled Saudi women. 

Owned by General Electric (GE), Tata Consultancy Services (TCS), and Saudi Aramco, the 3,200 square meter facility is expected to create 3,000 jobs for women over the next three years.  About 300 employees have already been hired, of which 90 are fresh graduates.  The center's first female employees received more than 80,000 hours of intensive training in areas like MS Excel, presentation skills, corporate etiquette, global culture, and communications.  TCS CEO Natarajan Chandrasekaran called the event a "new era" for the country's IT-BPO industry.

Increased Employment in India, China and the Philippines

Top outsourcing destinations India, China and the Philippines are experiencing strong economic growth through BPO, and the women in these countries are benefiting from improved employment prospects.  In the Philippines, for example, the BPO sector employs over 1 million workers, half of which are women.  India's ICT ad back office services boom is also increasing job prospects for women.  The BPO sector offers unprecedented flexibility in time and space, allowing scores of women to work at home or outside the office for the first time.  Women can now improve their incomes and become more financially independent while having the option to assume traditional roles.

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