The economic downturn may be lingering here in the United States, but in India, the financial situation is quickly becoming rosy. According to an article published today on MSNBC.com, India-based outsourcers such as Wipro, Infosys and Tata experienced a surge in U.S. contracts during the last quarter and are responding by hiring more workers and lifting salary freezes.

IT will gain a new nickname, the “No-Help Desk.” Employee morale will suffer.

That’s great news for the Indian workforce, but bad for U.S. companies. While the short-term cost savings from offshore outsourcing may appear to make it an attractive solution, here’s what all-in-one outfits like Wipro and others will deliver in the long-term:

• Poor customer service: The “help desk” becomes a place where, instead of help, your customers — er, employees — get only frustration. That equals longer hold times, increased abandonment rates, and more.
• Degradation of the help desk reputation: IT will gain a new nickname, the “No-Help Desk.” Employee morale will suffer.
• Increased shadow and underground support: Instead of waiting on hold for a half-hour or more, your employees will search self-serve help outlets, which are proven time-wasters, or they will ask the office software “expert,” and end up wasting the time of two workers. The lost productivity costs with this one are staggering.

Back in May, I wrote a rant on this subject that deserves repeating:

It’s surprising that so many CIOs continue to enter into contracts with offshore outsourcers, despite evidence that shows the cost savings are often nonexistent.

At this company (PC Helps), one of the most common questions customers ask our consultants is “Where are you located?” When our techs tell them we’re in the Philly suburbs, the consistent reaction is surprise, then delight — perhaps because the callers sense that maybe, just maybe, their issue will be solved today, and not after two hours of holding, spelling their name, rebooting, getting transferred, explaining their issue, holding again, explaining their issue again, and so on.

Choosing an offshore outsourcing partner for cost savings is short-sighted. It’s like opting to buy a Hummer instead of a Prius because the dealer slashed the sticker price; sure, it’s cheaper up front, but the fuel, maintenance and environmental costs are much higher with a Hummer over the life of the contract.

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Jenny Sweeney Outsourcing India, Infosys, msnbc.com, offshore outsourcing, recession, Tata, Wipro