Outsourcing & Offshoring
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Outsourcing
Outsourcing can be described as work that is being sent out to be completed by a separate party other than the parent company. Most notably outsourcing refers to sending jobs to be completed overseas; the most common example includes call center services, where individuals overseas receive calls answering questions customers might have about a specific problems, comments, or concerns. In recent years some such services have been transformed by the internet where questions are answered though instant messaging online without ever having to pick up a phone. For many, this option is more favorable due to the fact that many companies outsource such jobs overseas and unfortunately accents adversely affect many customers’ ability to fully understand and communicate with the service provider. Jobs are outsourced for many reasons, but the most obvious reason stands in the cheap labor costs.
Offshoring
Opposed to outsourcing, offshoring is a concept that is easier to comprehend. Unlike outsourcing where work is being sent outside a company to be completed, offshoring has eliminated the middle step; it has advanced directly to GO, collected 200 and exported the entire company overseas. Begging in the early 90’s the media pulled attention to oversea companies that employed children as their workers, sweatshops. Although slightly different than outsourcing, offshoring was born from the exact reason outsoucing was; taking advantage of exceedingly cheap labor is something any company is incapable of passing up. Anyone might find it challenging to find something that is not made in a different country. The company not only benefits from paying next to nothing for labor, they are also exempt from paying certain taxes that the company would otherwise have to pay if the company remained in the United Sates. Moreover, companies are no longer held accountable for poor working conditions as well as building code violations and standards set by the United States Government. Benefits to the company don’t just stop there; companies are less likely to be held to accountable for product protocols, manufacturing, or testing. All of which might have been the cause for lead poisoned paint used in children’s toys that affected millions of children.
Future of Outsorcing
At the beginning of the Information Technology boom, the United States was undoubtedly the leaders of the IT era. With the creation of the internet, many fields experienced exploded growth; most of all, technology based fields flourished and created new markets and new jobs that never before existed. Now nearly two decades into this era, other countries are gaining momentum and have caught up with the United States. The most notable country that has that has profited from the IT boom has been without a doubt, India. Have you called your credit card company lately? Chances are that the person that is going to help you with your questions lives somewhere in India. Is that not the case? Let’s try Pakistan, Saudi Arabia, or how about the Philippines? The fact of the matter is, that most of the major countries are becoming more and more proficient in IT based technologies and careers. Throw in the most important ingredient, that other countries are willing to work for a lower wages, and what kind of soup are we going to have for supper? The answer is obvious, outsourced jobs.
Before we start making signs, picketing, and marching down the street, we must look at some aspects of outsourcing. Some companies and corporations have retained from outsourcing jobs to different countries due to loss of customers and their complaints. The biggest complaint that may be heard from loyal customers is that it is hard to understand someone over the phone with an accent. Therefore many companies have refrained from outsourcing customer services overseas. Outsourcing may also tarnish corporate image, unsettle customers, and also lower the quality of products and services. However, outsourcing jobs may very well save a corporation from going out of business and help keep the majority of that corporation’s employees while lowering its expenses and costs. As the saying goes, give a man a fish and you feed him for a day. Teach a man how to fish and you feed him for a lifetime. Let’s take a look at why wages are lower in these countries, they are less developed and are at an economic disadvantage. By creating jobs for other countries, we can help stimulate their economy and in turn help fight poverty within those countries. At the end of the day, outsourcing saves corporations money which in turn lowers costs of products and services for customers.
Future of Offshoring
If people are hoping that companies will close down operations over seas and return to the United States, a word of advice. You shouldn’t hold your breath, wages that corporations pay oversea workers are just too good to give up from the corporation’s stand point. The sad truth is that as companies fight to stay competitive, it seems almost inevitable that corporations will send parts of their manufacturing facilities overseas.
What Can Be Done
The future of the job market may look grim, however there are some things that we can do. First we must look at companies that are brining jobs back to the United States. Take for an example Dell which has announced to bring back its phone-based tech support back to the U.S., why is this? The answer is dissatisfied customers, without customers a corporation cannot exist. What we as consumers lose sight of is we are the corporation’s share holders, without our participation the market and economy would not exist. We have seen such events in the past, such as the famous Boston tea party in 1773.
There is no simple cure for the outsourcing of jobs, and they way things have been going recently it doesn’t look like there will be one any time soon. Yet not all hope is lost, one characteristic that is most important lies with education. Other countries have gained an immense advantage due to their competitive education system. Math scores in high school and college in such as countries as India, which have benefited the most though outsourcing, are outstanding of those compared to in the United States. Why hire someone in the United States when you can hire someone in India that can do the job better and cheaper? We must plan ahead for the future, as there seems to be no slowing down for outsourcing. We must become better than the competition. For a competitive corporation to survive they must offer something that the competitor cannot offer, same applies to the future American workforce. The United States must start with higher education standards starting from grade schools. By the time children enter junior high school, they have already fallen behind in subjects such as math and science. As is true for all things in life, there is no simple answer and no simple cure to the outsourcing and offshoring problems; it will take hard work and determination, and as in the United States anything is possible.
Links
Netscape Helped Flatten the World[1]
References
Friedman, Thomas L. New York Times Magazine; Apr 3, 2005; ProQuest national Newspapers Core pg. 32
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