Off Shoring – Outsourcing Labor to Other Countries

Many businesses outsource jobs to other countries. Going out of the country is also known as off shoring, and it has proven to be beneficial in many ways. Lower labor costs is a main factor. Avoiding regulations that prohibit certain activities, finding and using new talent, and entering new markets are also considerations for going out of the country. The internet has made the world smaller, and telecommunication systems make connecting to someone out of the country as fast and easy as communicating with someone in the next room. This instant communication makes contracting computer based work with providers out of the country, viable and cost effective.

India, Russia, Ireland, Czechoslovakia, China, and Poland are all countries that domestic companies contract with for computer software services. These countries all have talented, fresh out of University, specialist eager to work at much lower wages than their American counterparts. Companies that don’t want to contend with the many challenges that come with off shoring, such as language barriers, time zones, and cultural differences, may chose to outsource closer to home. American companies outsourcing to Canada, Mexico or Central and South America would use the term near sourcing. By staying closer to home, a company can reap the same benefits of reducing operating costs while eliminating some of the problems encounter when working with a country that is half-way around the world in another time zone. Being closer in proximity allows for easier face-to-face contact, coordinating online or telephone meetings, and may diminish or eliminate communication problems caused by language barriers. In order to keep a closer eye on the operation, some companies co-source. This keeps some of the processes in house along with outsourcing. Co-sourcing gives the parent company a greater degree of control while still reaping the benefits of lower labor costs.

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Outsourcing – Obstacles to a Smooth Transition

More and more domestic companies are turning to outsourcing some of their operations in order to cut costs, but there are some risks to be considered. The savings in labor costs are not always as much as expected at first. For the first couple of years, the cost of establishing the offshore operation will offset the labor savings cutting the expected 40% or so down to about 15% to 25% until the bugs are worked out and the operation is running smoothly. Security breeches and the protection of intellectual property is a concern when working overseas. Though most offshore vendors have security practices equal to or exceeding those of domestic vendors, concerns and expectations need to be discussed and agreed upon. Another risk to be considered is the possibility that the vendor fails to deliver as promised. A contingency plan should be set in place to deal with such problems and an analysis done to determine what the impact might be on the overall operation. Domestic corporations have to be accountable to government regulations placed upon their operation. The ability of the offshore vendor to comply with these regulations, must be ensured. An obstacle that may seem obvious is the cultural differences. Most offshore vendors put their employees through training to help minimize these differences. Accent training and classes in cultural differences, focusing on religion, dress, and social interaction are all addressed. At best this serves to diminish the problems caused by cultural differences, but doesn’t eliminate them all together and it should always be a consideration when dealing with offshore vendors. Turnover of key personnel is fairly high with offshore vendors, due to the demand for qualified personnel. Training new personnel takes time and can have an adverse effect on profits. Outsourcing certain business operations can save money over the long run. But the obstacles must be addressed to create a smooth transition to offshore vendors and increase profits.

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Environmental Effects of Consumerism

Over consumption of tangible, non-essential products is part of what defines the developed world, with America and Western Europe taking the top prize for consumerism. Unfortunately the rest of the world, including more and more developing countries, isn’t far behind. Consumerism is defined as the need to purchase goods and services that reflect or improve one’s status. Even though it creates jobs and keeps the economy moving, consumerism is taking a toll on the environment. Natural resources are being depleted and the ecosystems are being compromised by disposable plastic products, bottles, and shopping bags. Many items, which were once thought of as luxury items have become necessities.

Products are made, quickly become obsolete and are replaced. Items that are disposable, are made to be used only once, or just for fun, flood our markets. The cost of producing products, the raw materials needed and the energy consumed, is not taken into account when cost is measured. Reliance on automobiles, even in countries such as China, where not long ago bicycles outnumbered cars, has made an enormous impact on the environment in the form of pollution and the dependence on fossil fuels.

Another negative impact from consumerism is the over consumption of meat, processed food, and fast, ready-made food. Raising livestock to meet the demands of the consumer impacts the water supply, and produces the destructive greenhouse gas, methane. Manure laden runoff from livestock pens, threatens fresh water streams and lakes.

Producing products to fill the need of today’s consumers is a strain on our natural resources. The factories needed to produce the goods create by-products that pollute the air and water supply. Consumers need to become more aware of the impact their buying practices have on the environment and if not cut down on spending at least learn how to counteract the environmental consequences by educating themselves about ways to combat the damage caused by consumerism.

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Employers Choose Temporary Help When Times Are Uncertain

The use of temporary employees is increasing as the economy continues to lag. Business owners, uncertain of their financial future, are reticent to fill open positions with full-time, permanent employees who expect some form of job security. Aside from it being easier for a company to hire and fire temporary employees, they also save on the high cost of health benefits and retirement packages. This trend is bad news for the job market, forcing job seekers to settle for temporary jobs or face unemployment. The idea of staying with a job for 20 or 30 years, is being replaced with the new reality or jobs and careers changing several times over a working lifetime. The hope of most temporary employees is that the current job will turn into something permanent, but recently that has been the exception, not the rule. Since temporary positions usually pay less than full-time positions, workers are living on less and are unable to put aside money for retirement. They also may have trouble establishing credit, with a job history that appears unstable. Private health insurance can be very costly, and is a further burden to the temporarily employed. Many find they can’t afford it and go without, leaving themselves open to possible financial disaster should an accident or long-term illness strikes.

On the positive side, some workers are embracing the trend, and find the flexibility of temporary positions an asset. It gives them a chance to strengthen and diversify their job skills and build a stronger resume. Some workers use the temporary positions as a stepping stone to their own entrepreneurial desires; earning a basic living, while having the time to build their own business. But even for those who welcome the temporary job market, the financial problems are still of major concern, and most workers are in search of that permanent job that will give them a secure future.

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Business Process Outsourcing

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BPO or business process outsourcing, covers many of the day to day tasks that keep a business up and running. By delegating these time-consuming task to outside providers, businesses save time, money and personnel. The business processes generally outsourced are divided into front office processes and back office processes. Front office task outsourced include call centers, telemarketing, advertising, and technical support. Outsourced back office processes are payroll, billing and accounting, human resources, and database maintenance. Not only does the company save money by outsourcing these processes, they are improving customer relations by delegating them to providers who are set up to deal with specific tasks, and aren’t distracted by other aspects of the business. Better customer satisfaction can lead to long-term customer relations, increase productivity, and bolster the companies competitive edge. Since most vendor’s services are paid depending on type of service and how much it is used, companies who outsource these services have flexibility to adjust to the changing needs of their company.

There is some criticism of business process outsourcing and a company should look at both sides of the issue before making the decision to turn over some of their daily operations to outside sources. Some customers convey a feeling of disconnect with the company when having to deal with an outside source and resent dealing with foreign accents and obviously scripted dialogues. They feel that outsourcing has caused a drop in the level of customer service when the vendor has no ties or vested interest in the company. The biggest debate, however, seems to be whether or not business process outsourcing results in job losses locally. Critics of BPO wonder what long term effect it might have on our unemployment numbers with these jobs being outsourced to foreign countries. Companies need to weigh the profitable aspects of outsourcing to vendors against the possible detrimental effects it may have on the local economy.

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