Outsourcing: Business in the 21st Century

In today’s world it makes more sense than ever for business to outsource much of their work. When a company chooses to outsource part or most of its work they save money on the maintenance of a full time employee which of course leads to larger profits. That’s what business is all about, larger profits, lower overhead, but all this comes at a price. The cost of outsourcing is that it could be a danger to the economy.

In December 2003, IBM decided to move the jobs of nearly 5,000 programmers to India and China. GE has moved much of its research and development overseas. Microsoft, Dell, American Express, and virtually every major multinational from Accenture to Yahoo has already offshored work or is considering doing so, with 40% of the Fortune 500 expected to have do follow suite. The savings are dramatic: Companies can cut 20% to 70% of their labor costs by moving jobs to low-wage nations–assuming that the work is of comparable quality.

Just as drastic are the loss of jobs and suffering of the people left behind. So far, at least, that enhanced productivity hasn’t translated into jobs at home. Offshoring is encrouching into the educated classes, both in the United States and elsewhere, affecting jobs traditionally considered secure. People whose livelihoods could now be at risk include everyone from IT experts to accountants, medical transcriptionists to customer-service representatives.

Fortunately there is a way for companies to have the convenience and cost effectiveness of outsourcing and still contribute to a healthy economy. There are many qualified and cost effective companies within a business’ own national community that can get the job done for a reasonable price resulting in an increase in company profits.

The most logical answer to the recent outsourcing crisis within the United States and many other nations are for business’ to realize that outsourcing doesn’t have to equal off-shoring to be cost effective.



Source by James Hunt