Across the country, workers with blue and with white collars are up
in arms about the jobs being outsourced to cheap labor in other
countries. "Our livelihoods flowing overseas!" But is this the
reality? Are jobs really flowing overseas to fill the pockets of
greedy investors and robbing the poor common man of his source of
income?
Laptop Battery Or is the reality different - does outsourcing your IT actually
create more jobs? And are there better ways to outsource than
moving jobs overseas?
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Thinkpad Rural Outsourcing - Taking It To the
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Microsoft When companies talk about outsourcing, they often cast their
eyes overseas, thinking about the fact that an Indian software
engineer makes between a sixth and a quarter of what his American
counterpart earns. This is an attractive thought - reduce your
workforce costs by 75% while still maintaining quality!
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Laptop Computers The math doesn't work like this, however. Outsourcing your IT to
a foreign country has unexpected hidden costs - setting up a
separate HR overseas, dealing with taxes, regulations, and
unexpected fees, and arranging for proper equipment to be installed
in areas that may not be perfectly set up for it can be much more
expensive than expected.
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Laptop Computer One old outsourcing solution that companies disillusioned with
outsourcing to foreign countries have turned to is places in
America where costs and labor are cheaper, but where you still have
a strong infrastructure and more or less the same laws. For
instance, a worker in New York City typically makes twice the
salary as a worker in rural Pennsylvania, not all that far away.
And many rural communities, eager for jobs to come to their area,
give tax breaks, land grants, and other deal sweeteners to large
companies bringing jobs to their areas.
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Car manufacturers and other
related industries have done this for years; anywhere you find a
major Ford or Toyota plant, you find dozens of satellite
companies in close proximity that supply them with needed parts
and equipment. But IT companies, seeing the possibilities of
zero transportation cost and time and really cheap labor
overseas, as well as a perception of rural areas as not
providing properly-qualified workers, eschewed that option.
Notebooks If You Build It, They Will Come
Lenovo Truth is, qualified employees in depressed areas tend to flock
to companies that will offer them a good job at a fair salary.
Rural communities, eager to have the injection of cash and jobs in
their area, will work with you, not against you - and for the rare
exception, well, there are always more places to look.
Hard Drive The facts are, after the unanticipated costs of outsourcing part
of your labor pool overseas, your savings are comparable to
outsourcing to a rural community. And in addition to not costing
yourself more
money than you would anyway, you
have the very marketable fact to advertise that you stayed in
your
home country, instead of taking
jobs overseas. Most of your customers are probably from your
area, not from the country you outsourced to. Take advantage of
that fact.
Travelstar There are other non-financial disadvantages to outsourcing to
another country - time zone differences, language barriers,
unexpected cultural differences, and the necessity for data
security are all areas that could make your offshoring more of a
hassle than your financial savings are worth. In fact, though many
US companies say they save almost half of their expenses by
outsourcing offshore, the actual savings are probably more like
twenty to twenty-five percent - numbers very comparable to your
savings by remaining in the country but outsourcing to a
financially depressed region.
Gateway Outsourcing Woes
Laptop Parts Part of the problem with outsourcing of any kind today is what's
being outsourced. Many companies started with peripheral expenses,
like janitorial services and fleet management, and wound up
outsourcing crucial core company functions, like accounting and
even secretarial services. A company is no more than the sum of its
workers. When you remove all the workers and replace them with
cheap contractors, are you really saving money?
Software Performance issues naturally follow from this shedding of too
much weight. According to research by groups like Socitm, many
companies that outsource - either domestically or internationally--
don't perform as well as before the outsourcing; the average user
satisfaction deficit, according to their recent study, was 13
percent. Other criteria, like value for money and company
perception by customers, showed similar drops. One has to ask
oneself if it's really worth it.
Hard Drives Numbers like this should give companies pause when considering
outsourcing. Clearly, the savings are not as great as they might
seem; and the savings you do achieve may not be worth the impact to
customer satisfaction.
Electronics But like any other business decision, it's something that only
the individual company can decide. Weight all the variables
together, and come up with a plan for dealing with the flaws of
outsourcing before you make the decision. Think creatively. Look at
the quality of companies you're considering outsourcing to. And
deliberate carefully before leaping forward
Canon
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