These skilled workforce will leave for any reason they can come up with – “I’m just bored”, “the working hour is long”, “I like the UK shift more than the US shift”, “I’m missing a social life”, “I don’t like the food”, “I don’t like the dress code of my co-worker”.

A few more to add:
“my boyfriend is working for that company”, “my boss sucks”, “they are are not promoting me even after spending 6 months in the job.”

Also, don’t forget the large population in tier-2 cities like Mysore and Hubli, just waiting to grab business from Bangalore. Many call centres have already diverted work away to Tumkur etc.

The real estate cost is a major factor for this – not the lame reasons (“dress code” – come on, you have to be kidding me. Do you think anyone cares?) – that you quote.

The reason is that there’s going to be a huge surge in supply. Think of the 100s of thousands of “call center” engineers that are going to graduate over the next few years. All these are the people that joined these courses over the last few years since the pays started increasing.

Also, you forget that India has a very large population. There will always be people willing to work for less. The current problem is only because of temporary supply constraints.

You have cited inflation as one reason for the increased pay. But, let me give you a counter instance. Take a city like Bangalore, the once sleepy little town. Even today, native Bangaloreans do not like their city having become the software hub simply because it has dramatically inflated the prices. The supply-demand gap between the s.w engineers implies that the existing people are paid lumpsome loads of cash. The subsequent disposable income means shops can now expect greater profits by charging more…, all while Bangaloreans apart from S/W engineers are still earnign the same peanuts. This way, they suffer inflation that is self-created.

Hire salaries will kill the small time players initially, and then pose a big problem for the big ones.

Equilibrium is coming in 8 years!