Indian call centers expanded in the late 90s and early 2000s and since then have served as a social laboratory of sorts… a few years ago a stream of articles covered Dell’s outsourcing of their tech support to India. Apparently the accents – despite the neutralization training – were not tolerable to customers in the US, who often adopted a fairly adverserial and rude attitude. And in their defence, they were having trouble with their computers which they needed fixed; they weren’t interested in, nor looking for, a cross cultural experience! Eventually, Dell shutdown the Indian call center after receiving a ton of borderline violent feedback.

But the call center saga continues. CNN reports that a myriad ills affect employees at Indian call centers. From weight gain, heart disease, depression to family discord! I wonder why it happens. Let’s see… you sit in a chair for 8-10 hours a day, speaking with people in a different country who you can never really relate to, supporting products or services that you may never have used or care much for! Often, the call center operators don’t even directly work for the companies whose brands they support. And often its more than a brand at a time. Very hard to see how anyone could stay motivated in an environment like this.

We’ve always thought the mass-market call center business is fairly brutal in its effects on employees. The industry has some of the highest turnover rates around. But, is suppor the kind of service companies SHOULD outsource to call-center “farms”? Should product support be handed over to dispassionate, low-paid employees? Maybe for trivial products and services it could work, but is the call center model the way its been adopted, viable in the long term? Have your say! Meanwhile, here’s some quotes from the CNN article:

Experts warn the brewing crisis could undermine the success of India’s hugely profitable outsourcing industry that earns billions in dollars annually and has shaped much of the country’s transformation into an emerging economic power.

Heart disease, strokes and diabetes cost India an estimated $9 billion in lost productivity in 2005. But the losses could grow to a staggering $200 billion over the next 10 years if corrective action is not taken quickly, said a study by New Delhi-based Indian Council for Research on International Economic Relations.

The outsourcing industry would be hardest hit, it warned.

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While there are a couple of exceptions to the implication in the headline, WebLo and Scrybe for instance, it does appear to be generally true. Pakistani companies are not attracting venture attention in general. Sure, you may have a few founders comfortable with the Bay Area scene making their case effectively and pulling money in. But that would not be due to the VC industry’s interest in Pakistan, or the identification of this country as strategic to their plans. Why is this so? A horrendously written article in the Business Recorder claims that it is because of 1) a lack of innovation and 2) an absence of the “hard work” ethic.

The Business Recorder article is essentially based on what seem to be interviews with some Pakistanis and a couple of europeans working in VC firms, both in the Bay and in Europe. One of the Pakistanis interviewed asserts that the reason why Pakistan is not attracting VC interest is because ideas coming out of the country are not really innovative and folks in the tech industry don’t really abide by the work ethic that places like Silicon Valley take for granted.

Those who are familiar with the industry in Pakistan probably have a lot more to say about the lack of a “hard work” ethic. Do we really have a culture of hard work similar to what exists in Silicon Valley? We’ve all heard of, read about or seen, depending on our exposure, companies like Netscape, where developers would routinely sleep under their cubes and practically live at the office for days in order to get a release out the door, on time. Calling this phenomenon “hard work” is really to miss the essence of it. This is not just about putting in long hours. It is about tying yourself up emotionally with the product you’re working on. While you’re working on it, it becomes an extension of your very being. And that drives the desire to perfect it, to make sure it is the best out there, that it comes out the gates at a a dead gallop the moment the referee pulls the trigger. It’s more than hard work. The hard work is merely one manifestation of the level of dedication and commitment exhibited towards the project. It’s about being true to your work, and being 100% invested in it, mind, soul and body.

How often do we see this amongst the employees or leaders in our local tech companies? I really do mean this as a genuine question. Not as one of those rhetorical questions that get answered by the author right after he’s asked them! So I’ll fight the urge to spill the beans on my own opinion.

The thing about this emotional investment phenomena is that it is viral. We’ve got to be able to point at a couple of companies in Pakistan where this is happening and is yielding excellence – in terms of product quality, innovation and/or commercial success. Due to the supply problems in the labour pool we’ve identified earlier, it’s just hard to see how you motivate a workforce that’s getting 30-50% year-over-year salary increases without having to demonstrate the emotional investment that builds great companies.

It can’t just be about the money! How do we get people to care? Your thoughts?

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Recently, DPS, an Islamabad based software services company had to layoff about 30-45 people due to a customer walking away. The nature of the services business is such that unless you have been operating for a while and have accumulated a veritable war chest, you can’t really have a significant percentage of your staff on the bench… particularly when you don’t have a pipeline that gives you comfort about being able to gainfully employ your engineers again. So, in order to save the company, and the jobs of the other 50-100 people, you decide to lay people off. Unfortunate, but completely reasonable and logical. In fact, not doing so would be tantamount to gross negligence and irresponsibility.

But how do people react to an event like this in Pakistan? Our tech services industry is relatively new, and employment in the past has mainly been characterized by guaranteed jobs with the government, labour unions and other borderline-socialist instruments that stack up the odds against entrepreneurship. It was amazing to read some of the comments Green&White got when they posted this story: (More after the fold)

One poster warns entrepreneurs of divine wrath:

oh dear, how sad and unfortunate is that, it’s almost like there is no hope for these capitalists they as ruthless as a black crow in aunty park in Clifton, khi where they hit the poor people who come to walk their in the afternoon.

may Allah be with their families for they are about to face hell. i wish those people could do a survey over to see what effects these kind of actions lead to before making these ruthless decisions.

Survey of effects? What is this, a Government run Railway? You’ve got a finite amount of cash and if you know you won’t be able to sustain 40 benched employees, doing a survey essentially means you burnt additional cash and now the employees that remain are at risk. I’ve seen similar attitudes in many tech companies in Pakistan. Employees often want to be very “baboo-like”. A good work environment is often one where the peon/office-boy-to-white-collar-employee-ratio is highest. I suppose the reason for all this is that there hasn’t really EVER been much of a culture of entrepreneurship of the Silicon Valley variety in Pakistan. While there have been some entrepreneurial successes, they have been few and far between. Now, we are poised at an important juncture where there are several tech companies in the country at a take-off stage. Attitudes such as the above can compromise the very existence of these companies.

And that isn’t all. Here’s another one:

Its sad, but true we as employees, do not have any sort of job cover or protection from these actions. We come under Shops and Establishment Act 1972. And some clauses of Factory Act 1934 are also applicable. Only protection we have is that if anybody wants to terminate the employment contratc, either employe or employer, have to serve one month notice or one month salary in liue of notice (sorry of if i spelled wrong). However there is the provision in this Act if an employee is terminated from employment, for any sort of reason, he shall be gievn a gratuity equivalent to his last drawn salary. But as we know, we are not given this type of gratuity at all.

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Even if go to labor court, it consumes lots of time and money, and its such courts are presuurised because these business man have links with influential people. What I think we can do is, we can form a Union. Otherwise I dont see any way out to avoid such actions.

Labour Unions? Gratuity? Let’s recap here. This is a company that has fallen on bad times and is trying to preserve itself. The company paid employees for the period during which services were rendered. It even tried to compensate with some severance. You want gratuity and compliance with labour laws from the mid 1930s, plus a month’s salary – when the company is bleeding? – and if you don’t get it you want to form a labour union? Go right ahead then, because if the labour environment in this country, the main reason why labour arbitrage is being done here, and why all these companies are starting up here, changes drastically and evolves towards more of a socialist model, entrepreneurs will simply take the next flight out to Shenzhen or Manila. There are examples of some Pakistani software companies that have had to do this already for slightly different reasons (labour scalability, image problems) etc. A fat lot of good it will do the labour union when it doesn’t have any employers left to bully!

IT companies are already facing hard times trying to keep up with ridiculously high salary increases employees are demanding. It’s one thing if you have a stellar, world class resource who you quickly ramp up to a competitive level. But the norm that seems to be taking hold in our industry is that, as long as a company is doing decent business, even poor performers expect unsustainable salary hikes. The reason why they get them more often than not is purely due to a supply issue, not because they deserve it. The number of CS and EE graduates being produced is abysmally low, and those with any modicum of communication skills are at a premium. The sad part is that the salary gap is closing so fast that in the next 2-3 years or so, much of the service business being done in Pakistan will not remain competitive. While salaries are increasing 30+% in software companies in Pakistan, they are increasing at 3-5% in the US. If a Pakistani resource gets to $25-30K base + a 30% fully loaded adder leading to $40K a year, s/he is really not worth the trouble from a purely practical ROI stand point. When you add up the risk of having people benched for part of the time, the risk-prone operating environment, communication and infrastructure issues, productivity per $ starts to compare unfavourably.

Since much of our industry is still in the software/IT services business, these are all things to think about pretty hard. Employee attitudes and expectations can shape the future of Pakistan’s information technology landscape. Tilt too far toward pro-labour policies and you risk upsetting the delicate balance entrepreneurs fight tooth and nail to maintain every day. Already tired of dealing with WAPDA, Customs, LDA/KDA/CDA and a host of other leech-like institutions, labour unions may just be the straw the breaks the camel’s back!

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Hopefully you can read the message on the back of this rickshaw, but if not, I’ll spill the beans in just a minute. On my way to work this morning, the above is what I saw. A beaten down orange rickshaw with a message that the HR managers in our local IT industry need to adopt as a mantra, “Ag lagay teria’n majbooria’n noo’n”. For those who don’t speak Punjabi (you don’t know what you’re missing out on!!), this loosely means, “Damn your compulsions!”. This significantly raises the bar for the pearls of Rickshaw Wisdom, my primary source of values and inspiration.

Come on, admit it. You’ve wanted to say this to your employees so often! When they use the old my-aunt’s-cousin’s-son’s-mother-in-law-passed-away excuse, you wonder what to say since you sort of remember her passing away last month. Well, this is what you should say And if you can’t say it out loud, say it under your breath to yourself and it’ll make you feel better. The next time one of your guys says to you, “I couldn’t send the weekly report to Ned at BigBankCustomerInNYC on time because…”, cut him off right there and bring out the BIG GUNS! “Ag lagay teria’n majbooria’n noo’n”.

On a serious level, when you’re serving customers globally who have very little knowledge of the social fabric and norms in our part of the world, it is important to abstract away anything that gets in the way of projecting an always-on, 24×7 approach to business. Your customer in Finland doesn’t really know or care about the fact that there was a traffic jam at the Mughalpura railway phattak (crossing). Figure out a way to get around it!

The reason Project Managers are at a premium, specially in our environment, is because they are not only responsible for managing the project, but for managing all these ups-and-downs we are so used to. They need to abstract away our unique issues while continuing to meet deliverables and keeping the customer oblivious of the gargantuan efforts involved behind the scenes. It’s a very challenging job, and I’ve seen only a few people who can manage it well. Maybe someone needs to suggest to LUMS (Lahore University of Management Sciences) that a course in this area – Global Relationship Management for Pakistani Project Managers – is not only the need of the hour, but is sure to be a hit with the BPO, Software, IT and other export focused industries in Pakistan.

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I recently heard a rather shocking story involving a local software firm (which we will leave unnamed, for it is barely germane to the rest of the story) and one of its former employees. Apparently, said company was having some payment problems with a foreign customer. By all accounts, the foreign customer was being quite a pain and refusing to pay several months development fees without initially having contested them. The local firm was using undelivered work as leverage to get their money – pay us for our work or you won’t get the deliverable. Fairly normal till here. Happens all the time. Until we add the spicy, local dimension…. The foreign customer, sensing that they would have to pay to get the code, contacted one of the senior developers on the project and essentially asked him what the “alternatives” were to get their hands on the deliverable.

The developer, eager to make a quick buck, stole the latest version of the application and uploaded it to the customer from a private account, thereby eliminating all leverage the Pakistani software firm had to recover its money.

And it doesn’t end here. The developer then, keeping everything hush hush ofcourse, resigned from the software firm on apparently good terms (little did they know!!), got a good recommendation and went to work for another firm in town. A week into it, our poor victim firm realizes what has happened, and that too, by accident. While they are figuring out how best to tackle what for them is truly a crisis, the question for the wider industry is, how often does this sort of thing happen? And what can be done to prevent it and skin the scoundrels who do this sort of thing?

Another very similar story is that of a large orthodontics company based in Lahore catering to the US market (woe is you if you can’t guess the name!). Apparently they were in the middle of a patent related lawsuit with a competitor in the US. The US competitor simply “hired” one of the factory techs and “encouraged” him to say the needful in return for relocation to Dubai for him and his family, accompanied by a handsome payout.

What Thieves and Scoundrels! Stuff like this can kill a nascent industry, which the software industry is in Pakistan.

A while ago some software industry CEOs in Lahore were toying with the idea of maintaining an industry wide “reference check” database on current and ex-employees. I, for one, strongly feel that if someone does something remotely close to the above, they should not only be blacklisted from the industry but have severe criminal charges pressed against them. The famous “drawing room ki sair” at the hands of the Punjab Police does have its uses!

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