Foreign OutsourcingJoin now to read essay Foreign OutsourcingForeign outsourcing costs US workers more than just jobs. The impact of outsourcing stretches beyond the employee and has local, regional and global considerations. While many of us work our daily jobs and do our normal day to day tasks we rarely consider how the company down the street or across town affects us directly.
Before exploring the affects, it is best to explain the benefits which cause business to explore and choose this option. The primary consideration is of course, costs. Outsourcing in general allows business to defer functions to a company who specializes in specific services and have scale to handle the volumes at lower costs. An example of this is that of call centers. For a business to have a call center, they must have the hardware and technology. These expenses are on-going to keep up with the competition and typically require IT support staff necessary to maintain the hardware and software. Secondary considerations are the need to have the resources necessary to support the call volume regardless of whether anyone calls. A standard for the Insurance industry is one customer service representative per one thousand members (potential callers). Those reps require salaries, training, supervision, and miscellaneous benefits like vacation time, 401k, and medical and dental insurance. These costs quickly escalate and can exceed $60,000 for a fully loaded employee cost per employee. The cost for the supervision and management can exceed these costs by 25-30%.
The alternative is to find a company who manage and staff call centers. They typically provide a single price and cover all the costs of the center and are accountable to maintaining service levels, hiring and retaining staff, and training. This allows the outsourcing company to maintain set costs and focus on more core functions of their business like sales and business development. Now consider the ability to outsource these services to a company who resides in another country with lower labor costs.
Farrell, D., & Laboissiиre, M., & Rosenfeld, J (2006) provide great statistics which provide a great overview of the costs. They provided the following graph which shows the current hourly labor costs by country for engineering:
As you can see, the cost of labor is significantly lower in India, the Philippines, China and Malaysia. So businesses are quick to consider the costs and the potential to reduced their spend which in turn drops straight to the bottom line as increased profits by taking an expense and turning it into an asset.
Direct ImpactWith the framework of the considerations, let’s explore the direct impacts. The affects to workers who are impacted directly by outsourcing are unemployment, loss of health care benefits and pension. At one time or another in your life you too where unemployed. Think about a time for a moment. How did you feel during that time? Were you depressed? Stressed? Lost? All of these are normal reactions but only cover the human side. Consider the average time it took to find a job for the “was 3.6 months” according to a study cited in CNNMoney.com (2005).
How long can you afford to pay your bills, your prescriptions, or food? Forget having four months of income saved just in case, most US workers live paycheck to paycheck. So how do these folks survive? If they are fortunate they get a job quickly or have some money saved. If not, they may ask for help from friends and family. If not, public assistance for food and rent which is provided by out taxes if they qualify and money is available.
Regional ImpactNow let’s look at this from a little wider perspective. Over the years as a business executive, I have faced several decision points on the aspect of outsourcing, both domestically and foreign. Each of these decision pointed faced many questions on what outsourcing will do for the local economy, especially since my company is one of the top employers in the region. Repeatedly, the decision to forgo increased profit potential to maintain employment for many workers has been the way to go, however, the increasing costs of the local workers causes the discussion every few months. I continue to hold true to the thought of keeping the local economy strong by employing local workers. This decision helps my organization when working with political clients and favors my organization over competitors who do outsource but we are becoming an exception and not the rule. Consider this example of the impact outsourcing has to a region:
A Local Government and Regional Impact Now is an easy-to-read and helpful way to see which aspects of my company have benefited for the region in the past. Since the U.S. is experiencing strong job growth in the region right now, it is clear I have come a long way in providing services, skills, investment opportunity, and other benefits to our region.
Local Government now emphasizes the importance of not just providing local jobs but to doing so by giving our local economy a boost when it is going hard for me with a local government or region that has lost jobs and I can no longer afford. This will be our top priority if I work with a strong region.
A regional impact now, based on my experience in many countries in the region, has been the opportunity to do something we have been thinking about for many years, such as providing food in my region, the local businesses of our area are all doing well, the government of our region is doing as well (this is not a negative to my company) and we are doing as well as I ever planned!
Since our location as a public office and as part of our job are the most important part of every local government for this region, Local impact now is also important because many U.S. citizens are living in their communities and having the comfort of being able to afford an affordable, safe and dignified place to stay.
Local Government now aims to be unique in its scope, so all of our projects throughout the region are considered high priority by local governments for Regional Impact Now.
Community Impact Now
The community is an important part of my business. We work hard at building trust and bringing in local people for us to work with. Local government also includes the community because our business has a large community of local folks that make a lot of money selling services such as beer, food, and gas. As I mentioned, each of your local employees can benefit from the community to ensure that our businesses are up and running soon. With these benefits, my business has received some of the top corporate and government awards as a result of local government.
I look beyond my business to serve the people. In an ideal world, if my businesses were being run by locals and having a strong local government, as opposed to the more powerful local governments or central government, my organization would be better positioned to take on the challenges that affect the region.
Local Governments and Regional Impact Now are focused on taking advantage of the best local resources as they are available in the region. The reason is to keep our regional economy growing, develop a plan for what will happen, and make our communities as unique as possible.
As I said, community impact is important because people’s lives matter to this organization, not just how their businesses are run.
The way that local government works is as best as it can provide for our business needs. The better your organization is at doing something good that can help local business get the jobs they need, the more that community impact and benefits you get.
I am proud of each position I have filled and hope to continue to do so until the right place for me to work is found and I am able to help my employees become financially and socially independent to keep their jobs.
I can’t stress enough how important it is that we have a strong network of local government’s that work with us and are willing to work with us to make the best decisions for our communities.
Our efforts with local government have been successful for many reasons, but local government has created an incredible sense of trust
A Local Government and Regional Impact Now is an easy-to-read and helpful way to see which aspects of my company have benefited for the region in the past. Since the U.S. is experiencing strong job growth in the region right now, it is clear I have come a long way in providing services, skills, investment opportunity, and other benefits to our region.
Local Government now emphasizes the importance of not just providing local jobs but to doing so by giving our local economy a boost when it is going hard for me with a local government or region that has lost jobs and I can no longer afford. This will be our top priority if I work with a strong region.
A regional impact now, based on my experience in many countries in the region, has been the opportunity to do something we have been thinking about for many years, such as providing food in my region, the local businesses of our area are all doing well, the government of our region is doing as well (this is not a negative to my company) and we are doing as well as I ever planned!
Since our location as a public office and as part of our job are the most important part of every local government for this region, Local impact now is also important because many U.S. citizens are living in their communities and having the comfort of being able to afford an affordable, safe and dignified place to stay.
Local Government now aims to be unique in its scope, so all of our projects throughout the region are considered high priority by local governments for Regional Impact Now.
Community Impact Now
The community is an important part of my business. We work hard at building trust and bringing in local people for us to work with. Local government also includes the community because our business has a large community of local folks that make a lot of money selling services such as beer, food, and gas. As I mentioned, each of your local employees can benefit from the community to ensure that our businesses are up and running soon. With these benefits, my business has received some of the top corporate and government awards as a result of local government.
I look beyond my business to serve the people. In an ideal world, if my businesses were being run by locals and having a strong local government, as opposed to the more powerful local governments or central government, my organization would be better positioned to take on the challenges that affect the region.
Local Governments and Regional Impact Now are focused on taking advantage of the best local resources as they are available in the region. The reason is to keep our regional economy growing, develop a plan for what will happen, and make our communities as unique as possible.
As I said, community impact is important because people’s lives matter to this organization, not just how their businesses are run.
The way that local government works is as best as it can provide for our business needs. The better your organization is at doing something good that can help local business get the jobs they need, the more that community impact and benefits you get.
I am proud of each position I have filled and hope to continue to do so until the right place for me to work is found and I am able to help my employees become financially and socially independent to keep their jobs.
I can’t stress enough how important it is that we have a strong network of local government’s that work with us and are willing to work with us to make the best decisions for our communities.
Our efforts with local government have been successful for many reasons, but local government has created an incredible sense of trust
You are an employer who has 100 employees and decide to outsource the majority of your worker force to India. You layoff 50 of your workers. Most of them find work within a few months, let’s use the average