Most people are aware of the negative buzz that outsourcing is creating – particularly in these days of high unemployment. Outsourcing to Asia – especially to countries such as China, India and Philippines has generated some controversy in recent years. Is it really bad for jobs?
Every nation has many advocates for keeping jobs within the country, and when people see the rising numbers of unemployed white collar professionals; it may seem like a good thing to oppose outsourcing. But is this really the best thing to do? The answers to this question can be arrived at by taking another look at why organizations opt for outsourcing in the first place and why, even in these days of fiscal turmoil, organizations worldwide are still resorting to outsourcing.
Contrary to popular perception as being a phenomenon of the information age, outsourcing has always been around. Industries have often chosen to outsource a part of their work for various reasons, the most common of which are lack of in-house expertise and cost-effectiveness. Outsourcing of manufacturing and blue-collar jobs has long been an accepted practice; but with the increasing globalization of services and business operations, many white-collar jobs have been outsourced to Asia too. This has come as a shock to many people who have been ardent supporters of outsourcing. The flight of high-value and high-paying jobs, coupled with the slow rate of regeneration of such jobs, has brought home the fact that this aspect of globalization is not really palatable to most people.
The cry for stopping this flight of jobs has been getting louder, but there is no gainsaying the fact that there are definite benefits to be gained from outsourcing work – it can bring lower the operating costs for one thing, and the end result can be reduced costs of goods and services with a concurrent increase in the purchasing power of consumers. The diversity and savings it brings can make companies more competitive, spawn entire new industries and boost the economy in time in various ways that are not apparent in the short term.
Furthermore, the jobs that have been outsourced are a source of prosperity and upward mobility to many skilled beneficiaries in these Asian countries. These beneficiaries in turn provide new markets. For businesses that outsource, it is a win-win situation too, as they have access to a vast pool of skilled labor that may not have parallels in their own country and more consumers to buy their products.
Of course, nobody wants to be an outsourcing statistic. Such workers have to either be retrained to get other well-paying jobs or to spend a long time on unemployment because similar jobs are not being generated at the same place or pace as they are being lost. Until the worldwide economy picks up strongly, the cry over outsourcing to Asia is unlikely to subside.