TaskUs Stock: A Risky Play on Offshoring

Here’s a question for all you ESG advocates out there. When you go through and run your numbers that show how “diverse” an organization is, do you classify the employees in emerging market centers as “Asian?” You should, because John in Mumbai and Rosie in Manila are indeed “Asians.” So, isn’t it a problem that these business process outsourcing (BPO) offices are entirely staffed with Asians? The truth is, nobody cares, because India and the Philippines contain a wealth of cheap labor. Well, they used to.

Multinational firms allocate annual compensation adjustments based on economic factors such as wage inflation data which helps make sure they’re staying competitive. The below chart from Statista shows the average increase in Indian salaries from 2018 to 2021.

Based on the above numbers, a Mumbai analyst who cost $40,000 a year in 2017 now costs $61,362 – an increase of more than 50% in five years. When that happens, you simply find countries where talent is cheaper – like the Philippines.

It’s More Fun in the Philippines

Running an operation in the Philippines is challenging because you’re not in Kansas anymore. From the rice allowances on paychecks, to the ladies taking days off around that time of the month, it takes some getting used to. During typhoon season, expect there to be days where Manila is flooded, and employees can’t get into the office. Even on normal days, Manila traffic will make sure nobody arri