Now that we’ve discussed some of the upside to offshoring, let’s talk about the downside.
Most notably is the financial loss to families from jobs being outsourced to other countries. Initially it appeared that the jobs being outsourced to places like the Philippines, China and India were primarily manufacturing, information technology, and call center management.

However, there are others.

A Commerce Department report recently indicated electronic engineers in the U.S. chip design industry are becoming more vulnerable to offshoring to China and India. (http://news.thomasnet.com/IMT/archives/ 2006/11/priority_shipping_offshore_outsourcing_highly_skilled_jobs.html)

And the Economic Policy Institute recently wrote, “Employer announcements of plans to move more white-collar jobs abroad can have an immediate effect on the willingness of the current workforce to accept lower pay increases and to work harder. If a greater share of jobs in the United States becomes exposed to foreign competition, this could place steady downward pressure on wages of U.S. workers.” (http://www.epi.org/content.cfm/issueguide_offshoring)

But it’s not just about losing jobs and the related income. Organizations face very real business concerns when they consider offshoring.

According to The Conference Board, a membership and research organization, corporate offshoring strategies need to include discussions about the risks related to things such as reputation and brand, social responsibility, human capital, regulatory and legal. This includes everything from the quality of vendors and staff to the business environment and government incentives.
(http://www.conference-board.org/utilities/pressDetail.cfm?press_ID=2583)

The problem is that business, and offshoring in particular, is so numbers driven, that non-financial issues are sometimes overlooked. Unfortunately, this is not a problem exclusive to offshoring, but often impacts business in general.

Case in point:

A very good friend of mine who works in a local call center is always complaining about the constant pressure to meet established metrics (you know, those things like average handle time, number of calls in the queue, and such) for low pay while dealing with abusive callers.

People can be so unkind.

Well, it seems that Indian operators are equally frustrated by abusive calls. Because of this and the fact that U.S. companies are always trying to lower prices driving down the quality of service, Indian outsourcers are reluctant to take call center business and are instead focusing more on deals for processing mortgages, handling insurance claims, overseeing payrolls, and such.

How can customer service, such a key component in any business, continue to take a back seat? The more some things change the more they stay the same.
Join me for my next blog when I continue my discussion on offshoring.

This entry was posted on Wednesday, January 24th, 2007 at 10:47 am and is filed under Organizational Change, Leadership. You can subscribe via RSS 2.0 feed to this post's comments. You can comment below, or link to this permanent URL from your own site. Your comments will appear immediately, but I reserve the right to delete innapropriate comments.