Outsourcing: A Fine Line between Opportunity and Exploitation?
When people hear about outsourcing, what often comes to mind are two things: Loss of jobs and cheap labor. There have been many sensitive issues in the world of outsourcing jobs to developing nations, and one can only wonder if these are truth or fiction. Over the weekend, I have encountered many discussions on the web about these issues, where outsourcing is thought to be a modern-day slavery in the virtual world.
Is Outsourcing a Bad Practice?
If you live in the US and you’re offered a $1 hourly rate to do data entry work, you might put on a barb that you’ll rather flip burgers instead. The issue with outsourcing is that people are hired depending on the cost of local labor in their area, not the value of their expertise. When the cost of doing a job is being compared, this is where the debate sizzles.
Outsourcing helps businesses, big or small, survive these tough times by hiring remote workers at a fraction of a cost that it takes to hire locally. In an economic letter made by the Federal Reserve Bank of Dallas, outsourcing was given a new name: Virtual Immigration. This gives the practice a more positive vibe, which should be seen as such. Outsourcing creates opportunities, where businesses can save money, as well as compete on a global scale. This then leads to cost-effective and innovative ways of doing things. On the other hand, more jobs are created in developed countries for people with value-added services and skills. There are pros and cons when it comes to outsourcing, like in any types of investment, where you have to do it right. But overall, there are mutual benefits to be gained on both sides.
The Issue of Fair Pay for Fair Work
We all know that the cost of living varies from one country to another. Still, the issue of paying a fair rate is something subjective. On a provider’s end, setting the right rates will definitely matter. On a client’s end, getting a cheaper worker who can do the same thing matters. For example, a customer service worker in the Philippines can cost $300 to $500 a month, which is three times less than what their US counterparts are charging. The moral issue of being ‘fair’ comes when you hire people who work for pennies on a dollar, yet you get massive profits. Is it still fair?
Outsourcing: A Social Responsibility
There are many ways where outsourcing truly pays off – by being a dream client who knows how to hire the right team and manage it well. Many have made the mistake of outsourcing the problem, instead of the solution. Those who did have failed. Another issue that surrounds outsourcing is Intellectual Property. So, before you hop into the outsourcing frenzy, you have to do your research well and make sure that everything is in the fine print.
By outsourcing work, you have given a new opportunity for people who have none, so they can prove their worth to the world. You, as a client, have a social responsibility of not only improving their lives, but also by training them to be globally competitive. By doing so, you improve the quality of your products and services as well.
Awareness is the key to change… for the better. You need to play it fair with your workers so you can get the best results your money can buy. Do you feel good paying more than an outsourced worker’s local rates? If you do, go ahead. You won’t regret that you did.
Do you think that outsourcing is an excuse for exploitation? Feel free to share your thoughts in the comments below.
New Developments and Legal Issues in Outsourcing
Something Interesting:
Did you know offshore outsourcing is now called “virtual immigration”?
Outsourcing in Difficult Times
