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Body shopping - biobased economy

Body shopping is the practice of consulting firms hiring workers (generally in the information technology field) to tactically outsource their services in the short to medium term. IT service companies that do body shopping claim that they offer real services (such as software development) and not the "deception" of merely supplying skilled workers to foreign companies.

History and origins

Body shopping in IT arose in the mid-1990s when there was a huge demand for people with mainframe, COBOL, and related technology skills to keep systems from being affected by the year 2000 bugs.

Most of the Y2K specialist consultancy firms in the United States, Europe, the Middle East, Japan, and Australia have outsourced their technical staffing needs to companies operating in India.

In the period from 1996 to 1997, such Indian-based companies responded to the strong demand by recruiting and training local graduates in India specifically for Y2K. Their consultants worked either on land or abroad with high occupancy rates and achieved enormous profit margins and cash reserves. The high profit margin during this period resulted in rapid growth and sufficient assets to invest in other IT-related businesses and expand their operations after 2000.

Modern era

In the modern era of IT offshoring, outsourcing, and cloud computing, the strategy of IT service companies is widely recognized (especially for those who work with a large technical base in India) to continue to focus on similar lines. The body shopping companies are known for training and developing technical skills for a wide range of customers currently in demand. Researchers indicate that many Indian companies are focusing heavily on developing a large pool of human resources with technical skills in order to create a marketplace where technical skills can be "bought" hourly or daily.

This led to significant market developments in two areas in the early 2000s:

  1. Fierce competition between IT service companies from India who are fighting their IT requirements on a global level for the tendering of time, material and work offers from multinational giants. While such a strategy is strongly tied to the end customer's sourcing needs, it enables IT companies operating from offshore companies (particularly India) to meet the demand for technical and managerial skills based on trends in the IT skills market to forecast in order to position yourself competitively.
  2. Technology and consulting companies that were mainly active in western markets in the 1990s (e.g. Accenture, IBM, Hewlett-Packard) had to open branches in Southeast Asia and relocate their workforce there in order to deal with traditional labor providers from India (e.g. B. Infosys, Wipro, Tata Consultancy Services) on a global level to compete IT bids on level level.

According to a report by the United States Citizenship and Immigration Services to Congress, 59 percent of H-1B visas for fiscal year 2012 were for computer professions. The same report also cited that 64 percent of H-1B visa applications issued were directed to workers originating in India.

Revenue model

Body shopping companies mainly hire offshore companies and provide training to their employees using their offshore facilities.

The short-term and long-term employment costs are generally offset by the highly profitable billing rate, especially in the case of on-site assignments abroad. Most companies have a utilization rate of 80%, which also takes into account the potentially long "banking period" in which an employee cannot be billed or when his or her skills are not in demand.

Indian body shopping networks

In India, traditional body shopping evolved in due course after Y2K to create strong networking and collaboration among competing Indian body shops abroad. All body shops claim to be able to accommodate Indian workers in almost every country using the resources and services of other Indian body shops operating in the destination country.

In a documented case study considered a case in point, a Hyderabad body shop was able to land a 360-man-month contract with a US company urgently needing 40 IT staff with a very "specific" skill for a 9-month project needed. Although the Indian body shop in India could easily find poorly paid workers for this job, the H-1B visa process would take too long to get them to work in the US. So the Indian company forwarded a request to its employees' network to locate 40 Indian temporary workers in the United States. The network searched for available Indian H-1B workers, resulting in a list of recently laid-off Indian H-1B workers in the United States. Sponsorship for the laid-off Indian H-1B workers was assigned to a body shop, and a portion of the newly hired worker's salary was given as commission to the peer body shop that helped keep the laid-off H-1B workers in their associate peer to locate network of Indian body shops. This process of quickly recruiting available H-1B holders is known as "body shopping".

Offshoring and nearshoring

A similar "offshoring" practice occurred more and more in 2010 and this was a practice known as "nearshoring". Nearshoring was the practice of hiring mostly IT professionals from Mexico. The outward appearance is the advantage that "nearshoring" personnel are within a time difference of 2 hours or less to continental US companies that choose to use these nearshoring services.

See also


  1. ^Aneesh Aneesh (2006). "Body Shopping". Virtual migration. Duke University Press. Pp. 39-40. ISBN 9780822336693.
  2. ^Brenda S. Yeoh and Katie Willis, editors, State / Nation / Transnation: Perspectives of Transnationalism in the Asia-Pacific Region, Routledge, 2004, ISBN 978-0-415-30279-1, pp. 166-167.
  3. ^Stick, Stephen; Putnam, Julie; Pham, Scott; Carroll, Jeremy. "Silicon Valley's" Body Shop "Secret: Highly Educated Foreign Workers Treated Like Identified Servants". NBC Bay Area. The unit of investigation. Retrieved on March 28, 2015.
  4. ^de Vallance, Brian. "Characteristics of H1B skilled workers". Document Cloud. United States Citizenship and Immigration Service. Retrieved on March 28, 2015.
  5. ^ Xiang Biao (2004). "The World System of Indian Information Technology Professionals: The Nation and Transnation in Individuals' Migration Strategies". In Brenda S. Yeoh; Katie Willis (Ed.). State / Nation / Transnation: Perspectives on Transnationalism in the Asia-Pacific Region. Routledge. Pp. 166-167. ISBN 978-0-415-30279-1.

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