In recent years legislators lamented the outsourcing practice that was taking place in the Territory, and now a prominent member of the private sector has added voice to the matter by announcing that the situation of outsourcing can have negative effects on the local labour market.
In his speech at the Ministry of Education and Culture’s 2016 outlook, BVI Lawyer and CEO of JOMA Properties Mr. Colin O’Neal referred to outsourcing as a “real threat” to the Territory.
“Many of you might have heard terms like offshoring and outsourcing and perhaps you wonder what they are and how they are relevant to what is going on in the BVI…find out, because they represent real threats to the continued well-being of the financial services industry and by extension the wider BVI economy,” the businessman announced.
“Outsourcing isn’t necessarily the transfer of jobs overseas, it is the utilizing of services in a jurisdiction outside of the Territory and again that is happening in the BVI and represents a threat to our labour force,” he explained.
Mr. O’Neal informed the gathering that more and more companies are sending various business tasks to countries such as India and as a result there are job loss for professionals in the Territory: “What we have been witnessing in the private sector in terms of offshore is a phenomenon where certain processes and tasks that have been traditionally done in the BVI, like particularly in the back offices of trust companies and law firms, for example, are now being done in places like India, Sri Lanka.”
The lawyer and entrepreneur illustrated why outsourcing is being considered by business organizations because of the disparity of pricing: “You take for example a place like India, in India a chartered accountant makes a salary of approximately $300 a month. In the BVI, a chartered accountant may make somewhere between $5,000-$10,000 a month. The global market for labour has made it easy for companies here to shift that kind of job overseas, and it is happening, and it continues to happen and it is going to happen even more.”
“What that represents for our people is that you are going to see a continual outflow of professional jobs paying middle class salaries and those jobs unfortunately are not likely to come back. Whether persons who had been employed in a professional service firm as a chartered accountant for example has been making $10,0000 a month, is going to be almost impossible…to survive to say half of that, but that is what we potentially face.”
Mr. O’Neal noted that architectural services is a regularly outsourced service: “There are architectural firms for example in India providing drafting services to architects worldwide, so where in the past a BVI firm may have employed say two or three draftsmen at whatever salary, lets say $50,000 a year, they are now outsourcing that work to places like India and paying a small fraction of the cost.”
He opined that he is not sure whether the Territory will ever be able to compete with places like Sri Lanka where a vast pool of professionals are willing to work at what locally would be considered very low wages. However, Mr. O’Neal noted that this is a question for labour experts to answer.
“One thing is certain, we may not be able – anytime in the near future – to compete with places like India or Sri Lanka in terms of price alone, cost of labour alone, but if we don’t raise the level of competence and skills we will certainly have no chance of ever competing with them…we will continue to see jobs leaving the BVI,” he added.
In 2014 Premier and Minister for Finance, Dr. the Hon. D. Orlando Smith announced that a solution to the outsourcing situation was being sought. Premier Smith at a press conference on May 20 told reporters that the outsourcing matter was looked into.