Outsourcing has been around a while & has been a major success the world over with even small businesses considering outsourcing their back-office operations to other countries. A recent cry from Americans regarding this is somehow justified in my mind. Some of them are loosing their jobs because someone else in some other developing country will do that same job for one-fifth the pay or even less.
Although some may argue that it works in taking advantage of the diversity of experience & knowledge but I am not completely sure whether it’s just taking advantage of the economic demographics. I wonder if a company would outsource if they had to pay the same wages, perhaps not, & that brings me to question the ethics in outsourcing.
It’s not just I.T. anymore; lately I have been getting offers to work for American recruiting companies but I am not too keen on working long night hours.
The topic of discussion here is whether there can be someway to nullify this effect of outsourcing. What do WE as human resource professionals think about outsourcing?
Although some may argue that it works in taking advantage of the diversity of experience & knowledge but I am not completely sure whether it’s just taking advantage of the economic demographics. I wonder if a company would outsource if they had to pay the same wages, perhaps not, & that brings me to question the ethics in outsourcing.
It’s not just I.T. anymore; lately I have been getting offers to work for American recruiting companies but I am not too keen on working long night hours.
The topic of discussion here is whether there can be someway to nullify this effect of outsourcing. What do WE as human resource professionals think about outsourcing?
Sidharta,
Hi!
You raised a very good point there. But it seems the direction you would like to pursue borders on ethical and moral issues on the matter. Am I right?
I have the privilege of being able to talk to an American businessman who is engaged in this business. He is doing exactly what you described.
However, his motivation is twofold: one, to do business by pocketing the difference between the cost of labor in his country and my country; and, two: to allegedly provide employment in a country where unemployment and low minimum wage is the prevailing labor market set up.
I thought this phenomenon called outsourcing must be a brainchild of HR professionals. To me, outsourcing is just a new label for an old business practice called "labor contracting only", which is generally considered an anti-labor business practice. This is the reason why in our country, the Labor Code makes a very clear guideline on the matter.
On the other side, however, there is a lot of merit for small and big business to let other individuals and organizations make a business or earn an honest living doing the non-core aspects of their business operation. This will enable them to focus on their core business activities. Isn't it?
The only argument that logically springs from such an arrangement is what you have exactly raised, i.e. the legality, morality, etc. of transferring such jobs from one area to another, with one area losing their jobs, another getting them, with the businessman-broker taking advantage and pocketing the difference in labor market values around the world.
Quite an interesting topic for philosophy. This reminds me of the writing of Karl Marx on Capital and Labor Surplus Value.
Best wishes.
Ed Llarena, Jr.
Managing Partner
Emilla Consulting
From Philippines, Parañaque
89Hi!
You raised a very good point there. But it seems the direction you would like to pursue borders on ethical and moral issues on the matter. Am I right?
I have the privilege of being able to talk to an American businessman who is engaged in this business. He is doing exactly what you described.
However, his motivation is twofold: one, to do business by pocketing the difference between the cost of labor in his country and my country; and, two: to allegedly provide employment in a country where unemployment and low minimum wage is the prevailing labor market set up.
I thought this phenomenon called outsourcing must be a brainchild of HR professionals. To me, outsourcing is just a new label for an old business practice called "labor contracting only", which is generally considered an anti-labor business practice. This is the reason why in our country, the Labor Code makes a very clear guideline on the matter.
On the other side, however, there is a lot of merit for small and big business to let other individuals and organizations make a business or earn an honest living doing the non-core aspects of their business operation. This will enable them to focus on their core business activities. Isn't it?
The only argument that logically springs from such an arrangement is what you have exactly raised, i.e. the legality, morality, etc. of transferring such jobs from one area to another, with one area losing their jobs, another getting them, with the businessman-broker taking advantage and pocketing the difference in labor market values around the world.
Quite an interesting topic for philosophy. This reminds me of the writing of Karl Marx on Capital and Labor Surplus Value.
Best wishes.
Ed Llarena, Jr.
Managing Partner
Emilla Consulting
From Philippines, Parañaque
Hi Gautam,
Yes, I agree that there is probably not much we can do as HR people & I also agree that corporates are heartless when it comes to deciding who will stay or "where" they want to get their work done. But my question was this, "Is it right to outsource work to foriegn countries only on the basis of cheap labor?" The difference in usual labor charges is huge.. the web hosting company where this site is hosted charges $100 per hour for support services. So you can imagine the difference where programmers in my compay are charging less than $10 per hour.
My question was whether there can be any way to counter this by means other than "Stopping outsourcing". For example, sometime back there were talks about US lawyers coming & practising law here in India... What kind of effect would that have? Can there be other ways where the overall effect of outsourcing can be nullified?
The way I see it I think there can be a definite way to coexist, where noone is hammered. I was reading an article a few days back where a brilliant US programmer was saying that he made a mistake in entering the software industry & that he should probably have done a business course. That's just sad.
But perhaps the saving grace for the employees in the developed countries is that not ALL work can be outsourced but the way technology is advancing... it may soon be possible to do anything or rather outsource any kind of work not just back-office operations. :)
Regards,
Sid
From India, Gurgaon
Yes, I agree that there is probably not much we can do as HR people & I also agree that corporates are heartless when it comes to deciding who will stay or "where" they want to get their work done. But my question was this, "Is it right to outsource work to foriegn countries only on the basis of cheap labor?" The difference in usual labor charges is huge.. the web hosting company where this site is hosted charges $100 per hour for support services. So you can imagine the difference where programmers in my compay are charging less than $10 per hour.
My question was whether there can be any way to counter this by means other than "Stopping outsourcing". For example, sometime back there were talks about US lawyers coming & practising law here in India... What kind of effect would that have? Can there be other ways where the overall effect of outsourcing can be nullified?
The way I see it I think there can be a definite way to coexist, where noone is hammered. I was reading an article a few days back where a brilliant US programmer was saying that he made a mistake in entering the software industry & that he should probably have done a business course. That's just sad.
But perhaps the saving grace for the employees in the developed countries is that not ALL work can be outsourced but the way technology is advancing... it may soon be possible to do anything or rather outsource any kind of work not just back-office operations. :)
Regards,
Sid
From India, Gurgaon
I guess if the Indian Govt. dilutes / amends the stringent Labour Laws and promotes Contract Labour, the very idea of working for a foreign MNC will be abolished. India has one of the cheapest labour force(Not utilised properly due to ambiguous and losely framed laws), plenty of resources and capacity of huge investments. The only bottle-neck is the VISION.
I guess there will be a time in India when the very HR department will be abolished and the activities outsourced.
It is high time the people of India become aware of the fact that other nations are growing on Indian Money. Not only that...the potential Human Resource is flowing out of India, hats off to the Employment Laws in India where people registered with the Employment Exchanges reach retirement age by the time someone locates the potential.
I just wish the HRD / Labour ministry of India participate in this forum with its comments.
Best Regards,
Sonia K. Nair
Sr. Manager - P&A
GWIL - Gandhinagar, Gujarat, India
From India, Ahmadabad
I guess there will be a time in India when the very HR department will be abolished and the activities outsourced.
It is high time the people of India become aware of the fact that other nations are growing on Indian Money. Not only that...the potential Human Resource is flowing out of India, hats off to the Employment Laws in India where people registered with the Employment Exchanges reach retirement age by the time someone locates the potential.
I just wish the HRD / Labour ministry of India participate in this forum with its comments.
Best Regards,
Sonia K. Nair
Sr. Manager - P&A
GWIL - Gandhinagar, Gujarat, India
From India, Ahmadabad
I come from the United States and about a year or so ago there was a large Steel Mill that went out of business here because from what I have heard is that they have been outsourced as well. Alot of people here some 1,000's lost their job like overnight in Utah here. This does a lot of harm to our economics here too, because now there are alot more people that will be needing help whether it is by unemployment or will be out of work and not be able to get new work, this causes then the rest of the area to suffer too.
Where I am originally from in Minnesota, here in the USA there is a snowcat maker called Polaris Industries and if they were to be outsourced or what have you just about all of Northern MN would be in a bind and suffer greatly. I don't see that happening in the near future but if that were to happen... it would have long reaching effects, the town of Roseau, MN where it first started Relies heavily on the work that Polaris provides to the area.
I too wish that we wouldn't lose jobs to other countries, because in lots of ways even if the money is better somewhere else they are still hurting those of the home country.
If there was to be a company that moved to the US near me and I knew it was from another country I would feel bad that all of those people had to lose their jobs so that we could have this company here.
Where I am originally from in Minnesota, here in the USA there is a snowcat maker called Polaris Industries and if they were to be outsourced or what have you just about all of Northern MN would be in a bind and suffer greatly. I don't see that happening in the near future but if that were to happen... it would have long reaching effects, the town of Roseau, MN where it first started Relies heavily on the work that Polaris provides to the area.
I too wish that we wouldn't lose jobs to other countries, because in lots of ways even if the money is better somewhere else they are still hurting those of the home country.
If there was to be a company that moved to the US near me and I knew it was from another country I would feel bad that all of those people had to lose their jobs so that we could have this company here.
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