Outsourcing Jobs to Foreign Countries
A recent issue of CIO Magazine provided a very good overview of where the latest trends in outsourcing US IT jobs to foreign countries. In some places, the benefit of labor arbitrage is disappearing. And while India remains the leader for outsourcing, other countries are stepping up to the plate.
Outsourcing Countries on the Decline
Canada - The shift in exchange rates between Canada and the US have largely eliminated the benefit of using Canada. In face, some US cities are now cheaper.
Israel - IT professionals are relatively expensive here and the political instability doesn't give the warm and fuzzies to corporate leaders.
Singapore - Also too expensive. So much so that Singapore outsources to China. Not quite the endorsement one wants.
Stepping in to fill the shoes of the above the countries are the likes of China, Malaysia, Hungary, Czech Republic, Poland, Russia, South Africa, and Mexico. The reasons primarily the opposite of those mentioned for the declining countries namely an increase in IT skills, low costs, and some level of economic and political stability.
I think Kelly brought up some good points that deserve to be addressed. One of the problems with outsourcing and servicing the US is that there are quite a few people that are intolerant of other cultures and languages. No matter what you do, there will be a percentage of people that are just frustrated that they have to deal with service outside of the US...no matter where the work's being done.
One of the ways around that is to not offer customer-facing services to be completed offshore and many companies are opting for this. It's an unfortunate reality, but it often makes sense to have a US based representative work with the client and then ship the work offshore via a CRM. You avoid taking the customer experience hit and still are able to provide good quality at a reasonable price point.
No matter how you slice and dice it, outsourcing/offshoring is here to stay. Until the stigma that is attached is low enough, we've found this to be an acceptable alternative for most of our clients.
Outsourcing to any foriegn contry is basically bad economics and is wrong! Lets at whats is happenning to this country's economy. We have less tax revenue coming in because most of the workers overseas make 11,000 or less. Corporate executive have become common theives, while the people who to do most the real work are stuggling. History repeats itself from the great depression and the robber barons of the early 1900's. Forien workers basicall pay no taxes here, do not buy american products and when they do work here, they send their money home to their families while the executives here in the US pay out 20 million dollar bonuses to their upper management and then lay off the Janitor! My parents built and fought for this county. I think we should all march on Washinton with pitchforks. Thats what our forefathers did and guess what? It worked!
Americans are getting robbed with a smile i could not agree more.
Outsourcing to any foreign country is basically bad economics and is wrong! Lets at whats is happening to this country's economy. We have less tax revenue coming in because most of the workers overseas make 11,000 or less. Corporate executives have become common thieves, while the people who do most of the real work are struggling. History repeats itself from the great depression and the robber barons of the early 1900's. Foreign workers basically pay no taxes here, do not buy American products and when they do work here, they send their money home to their families while the executives here in the US pay out 20 million dollar bonuses to their upper management and then lay off the janitor! My parents built and fought for this county. I think we should all march on Washington with pitchforks. That's what our forefathers did and guess what? It worked!
Great Post, anyway I think the Philippines is also a good place to invest in. The country have been practicing outsourcing for a very long time, other than being almost dirt-cheap in its services it offers a lot of potential for the client and the host country. Thanks!
US-jobs was being outsourced in different part of the world because thay wanted to save money at the same time getting a very satisfactory quality service!!!
Having had to deal with outsourced services in several areas, I will say, unequivocally, it is an absolute nightmare. They barely speak English, and if they do it's impossible to understand, they don't understand us or don't listen -- and don't want to. They take forever to do something an American or at least a Westerner would grasp and probably be done with in a fraction of the time. They have no concept, and indeed want none, of the culture they are working with. They are arrogant, rude and demanding. I don't care how much money corporate saves, they have unhappy customers, and do I hear correctly that several corporate areas have pulled their service back to the States? I wonder why. I haven't heard anyone rave about how wonderful it is to deal with these people, rather the opposite raving is more common--exclusively.
Then after one (of several) extremely frustrating experiences, I get this customer service satisfaction survey call. Was that rigged... if the situation was in any way resolved, I was a 'satisfied customer'. I put a stop to it when I asked if there was any point at which I could make comments, or if I would be asked if I found the experience satisfactory, there wasn't.