Seventhman Blog

Outsourcing and Job Creation: A Two-Way Street!

"outsourcing"I have always wondered if the world today can survive without outsourcing and if it can, just how will the economy look.  Last year, I have asked a couple of folks if they think that outsourcing is a one way street ( see responses here ) and I’m amazed at the clashing insights I have received, and each answer has a point to make.  It’s pretty much obvious that the term ‘outsourcing’ is still a misnomer for many and the debate over this topic grows with favor ( and disdain ).  It’s not really a question of how emerging outsourcing destinations can become more attractive to investors, but more of a question on how to get jobs back to the U.S. – and if the latter is even possible to start with.

Outsourcing: The Beginning of a One-Way Exodus

Like many people who have asked the same question, they are inclined to think that outsourced jobs aren’t coming back, that unemployment rate will soar higher.  This may be said in the manufacturing industry where we see factories shut down and work is outsourced offshore to cut down on costs while staying competitive.  Should we blame the demand for a faster, cheaper and better product these days?  When customers demand the best value for the best price, most often, sacrifices are made and for this reason, repetitive tasks ( and a large number of it ) are outsourced and may never come back.  It’s simply a play of numbers, where lower wages and operating costs in developing countries tip the scales.  More American workers are out of work while outsourced work is reaching a saturation point. Before, it’s only low-skilled jobs which are outsourced overseas but now, we are experiencing a loss in intellectual capital as highly-skilled work is sought outside.  Is it lack of talent onshore that finally drives businesses to seek skills offshore?

A Peek at Outsourcing’s Controversial Loophole

While many fear that jobs won’t be coming back, there are those who say that offshore outsourcing is a two-way street.  In this age of globalization, many firms are doing businesses across the globe and this means creating jobs in first world countries too.  Just take a look at India’s Infosys with onshore facilities in the U.S.  Then, there are multinational firms who are insourcing as they do outsourcing.  Small businesses have also reaped rewards in finding help offshore so they can grow in a competitive market.  Not only can they control capital costs and increase productivity while reducing labor costs, but outsourcing helps them focus on their core business so they can start on new projects much faster than before.  Yes, there were failures along the way and yet, many are transforming their business model in a flat world.

It All Comes Down to Cost, Quality and Time

Going back to the question if outsourcing is a one-way street, I’d rather say that it isn’t.  In the end, it doesn’t matter where you source, for whatever investment is made will always come back in new forms ( jobs, companies, business opportunities ).  Perhaps, western media may be biased in educating people about facts where matters of outsourcing offshore is concerned.  Besides, there are other reasons why companies outsource and it is directly proportional to attrition rate.  We  should also be asking why people change jobs too.  Let us start asking ourselves how we can deliver the best service, a class-A quality product… in the shortest time at the right cost to satisfy our customers instead.. What do you think?

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  • http://www.tatvasoft.com/offshore-software-development.asp Jeremy Wise

    Definitely due to outsourcing U.S. has lost their jobs but on the other hand they have gained a lot from outsourcing too at an affordable rate. If outsourcing has positive side, it has negative side too.

    • seventhman

       Thanks Jeremy – I believe it’s a matter of mutual benefit for both parties, the business and the outsourced vendor

  • http://www.profiletree.com/ ProfileTree

    Outsourcing can be a good source of  job creation. Many companies do outsourcing if they have a tight budget and limited time frame. :)

    • seventhman

       Thanks!  Yes, cost is the no.1 driver for outsourcing, among many other things.