Higher labour costs for Macquarie Bank pushes jobs to India: just how much will be outsourced?



Despite higher profits, increasing labour costs are prompting Macquarie Bank, Australia's largest securities firm, to shift as many as 100 administrative jobs to India, according to Bloomberg. Macquarie's profit climbed 51 percent to A$730 million in the six months ended Sept. 30 from a year earlier as Chief Executive Officer Allan Moss increased income from buyouts and got higher fees for arranging takeovers and managing investment funds. But labour expenses at the bank also surged 54 percent to whopping A$1.8 billion in the same period, according to company reports.

Positions from divisions including payroll services will be moved from Sydney and London, said the people, who declined to be identified because details haven't been announced. The bank plans to combine its global human resources functions as part of a “strategic review,” said Macquarie spokesman Stephen Yan in Sydney. He declined to comment further.

But it’s not a first. Macquarie joins Credit Suisse Group and Australia & New Zealand Banking Group among banks that are hiring in India to take advantage of the nation's lower labour costs and pool of skilled workers. Credit Suisse, Switzerland's second-biggest bank, said in November it will employ 1,500 people in India to support business in 50 countries. UBS, HSBC, Aviva and Barclays are also hiring in India, which produces three million graduates a year.

Macquarie has tripled its workforce to almost 9,000 spread across 24 countries since 1999. The plan, being managed by Accenture, means job losses in Australia and the U.K., said the people familiar with the company's plans for India.

Right now it is only the administrative workload which is being transferred to India. Is it just a matter of time before other work processes are outsourced as well? And what are these other processes that can be outsourced? Can technology truly lead to a global workplace, where even the core functions of a bank are decentralised?

Tell us what you think.