Saturday, July 14, 2012

Is Offshoring a 4-Letter Word?

I'll cut to the chase.  In my opinion, yes, offshoring is a 4-letter word.  While I can understand the arguments made in favor of offshoring, from a long-term and "big picture" perspective, I just think it's a bad idea for America.  Here's some articles from The Economist, Foreign Policy Journal, Procurement Intelligence Unit, and HRO Today that provide some food for thought. 


Not to be confused with outsourcing (contracting work out to an external organization, which could still be within the US), offshoring (getting work done in a different country) is definitely the worse of the two.  In this context, I'm referring to offshoring as contracting work out in a different country, not hiring W-2 employees in another country. 

So why is it bad?  Here's a few reasons.  First, the permanent elimination of numerous jobs.  Hmmm, fewer opportunities available and an increased labor pool (from layoffs and a growing population base).  Can you say lower wages?  And when you throw in a flat or increased cost of living with it, that's a problem.  Second, it is an absolute morale killer.  Those that lose their jobs are eternally resentful and the remaining workers are discouraged because they think their job may be next to go.  Here's just one of many surveys that show this point.  Third, more often than not, quality of work suffers.  In the past, I worked for a company that had offshored a considerable number of positions.  The quality of work delivered by the offshore team was awful.  If they were employees, they would have been fired within weeks.  But since it was such a huge labor shift, we were basically pot-committed.  We tried to change team members multiple times, but the result was still the same.  And lastly, demographic issues such as language barriers and time difference are very real hinderances to productive, quality work.

I don't want to get into discussions of globalism vs. protectionism.  I'll leave that to the think tanks, government committees, and university-types who probably never worked a real job in their life.  I just know from what I see, and offshoring is definitely a 4-letter word.    

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