COLOMBO, Sri Lanka — Southern China has its assembly plants. India has customer support centers, research laboratories and low-cost lawyers.
And Sri Lanka’s contribution to global outsourcing? Accountants — thousands of them, standing ready to crunch the world’s numbers.
As this tiny island nation staggers back from a bloody, decades-long civil war, one of its brightest business prospects was born from a surprising side effect of that conflict. Many Sri Lankans, for various reasons, studied accounting in such numbers during the war that this nation of about 20 million people now has an estimated 10,000 certified accountants.
An additional 30,000 students are currently enrolled in accounting programs, according to the Sri Lankan Institute of Chartered Accountants. While that ratio is lower than in developed economies like the United States, it is much greater than in Sri Lanka’s neighboring outsourcing giant, India.
Offices in Sri Lanka are doing financial work for some of the world’s biggest companies, including the international bank HSBC and the insurer Aviva. And it is not simply payroll and bookkeeping. The outsourced work includes derivatives pricing and risk management for money managers and hedge funds, stock research for investment banks and underwriting for insurance companies.
Many developing countries have “one particular competency that they do better than anyone else,” said Duminda Ariyasinghe, an executive director at Sri Lanka’s Board of Investment. “Financial accounting is that door opener for us.”
With widespread use of English and a literacy rate of over 90 percent, along with rock-bottom wages, Sri Lanka hopes to transform its postwar economy from a sleepy tea and textiles island into a tiny, high-end outsourcing powerhouse.
Already there are thousands of other Sri Lankans working in more common outsourcing fields, like information technology and software development. About 50,000 people in Sri Lanka are now employed in one form of outsourcing or another, according to Slasscom, an outsourcing trade group, and that figure is growing by 20 percent a year.
But accounting is Sri Lanka’s specialty.
During the war, Sri Lankan certified accountants would often use their skills as a springboard out of the country. That is why there are now Sri Lankans sprinkled among executive suites around the world, including the vice president of global business services at American Express and a financial controller at Standard Chartered Bank in the United Arab Emirates.
Now, though, the government and business community hope the country’s young financial whizzes will have reason to stay home instead.
Sri Lanka’s government, headed by President Mahinda Rajapaksa, expects revenue from so-called knowledge-based outsourcing — which includes accounting — to triple to $1 billion in revenue by 2015.
The stark wage differences between Sri Lanka and America, or even Sri Lanka and India, are a big part of the country’s drawing card.
In the United States, the median annual wage for accountants and auditors in May 2008 was $59,430, according to the Bureau of Labor Statistics. Sri Lankan workers in the accounting profession receive an average annual pay package of $5,900, according to a 2010 survey by the Chartered Institute of Management Accountants.
Wages in Sri Lanka for financial outsourcing are about one-third less than in neighboring India, and hiring educated employees is easier in Sri Lanka, according to executives who do business in both countries.
“Skilled talent is accessible,” said Dushan Soza, managing director of the Sri Lanka office of WNS Global Services, an outsourcing company with about 350 people in the country. Because Sri Lanka’s accountants are still a relatively untapped asset on the global market, Mr. Soza said, hiring is easy and turnover is minimal.
In the Indian city Mumbai, companies like his would have to go far out of the city to hire because of the level of competition, he said, but here in Colombo “two miles from my office is my hiring range.”
Many international executives also quietly admit that Colombo’s colonial architecture, excellent seafood restaurants and proximity to miles of sandy beaches make it a more alluring business travel destination than India’s outsourcing centers.
Sri Lanka’s accounting specialty is rooted in the country’s history of colonialism and conflict.
State-financed universities here have traditionally not had enough places for qualified students, and they were often closed intermittently during the war. So students who could afford to attended private schools instead — in many cases accounting schools with British origins that date to Sri Lanka’s independence from Britain in 1948.
Over time, becoming a qualified accountant has become something well-educated, business-minded people in Sri Lanka do in addition to getting a degree in, say, physics or business management.
By HEATHER TIMMONS
Published: November 29, 2010