“There’s no place like home” – Dorothy, The Wizard of Oz
The tragic events that occurred in Mumbia last week have rekindled an issue that seemed to have been set aside since the acceleration of offshoring began earlier this decade. Simply put, that issue is risk.
Articles like this one from Workforce Management: “Attacks in Mumbai Could Force Execs in U.S. to Rethink Outsourcing Plans”, make the point that the risks associated with moving jobs offshore are real and growing more complex than could have been anticipated years ago.
A recent report by the TowerGroup suggests that companies may now be taking political risk into consideration as part of their offshore decision making process. (MarketWatch December 3, 2008).
Political and financial instability created issues that probably were not factored in when the original decision to move jobs overseas was made (probably by different executive teams) earlier in the decade. And while experts seem to agree that the Mumbia terrorist attacks probably won’t result and any loss of outsourcing business, it may serve as a wake up call in many board rooms across America. One way this may manifest itself is in the area of contingency planning. Contingency planning (in the event the jobs had to be brought back quickly) may have been set aside in the past because the perceived risk at the time was low.
U.S. Workers Should Be Considered as Part Of Any Contingency Plan
While other offshoring venues around the world will certainly be taken into account, we’d like to suggest that companies should also consider the possibility of bringing at least some of those jobs back to the U.S. as part of any contingency plan. Given the rising unemployment in this country, and the large cost of living discrepancies that exist between cities and outlying areas, companies could hire U.S. workers, let them work remote and still show a significant savings over original costs. In fact, when all the cost of offshoring are taken into account, companies may find that this approach may actually be preferable to their current offshore operations that require interaction from U.S. business units.
Utilizing our Homeland Onshore Model (HOM), we have been able to successfully demonstrate just how effective this approach can be (Savings up to 50%). Given the growing issues here at home, we believe the timing is good for U.S. based firms to look within our own borders for creative cost saving answers. Right now, our country needs to keep people working and stop the cycle of demand destruction that goes with rising unemployment.
Who knows, the jobs they save just might be their own.
For more information on the “Homeland Onshore Model” Please visit www.ITONshore.com.
August 17, 2009 at 12:09 am |
It is highly unethical that US corporations are laying off their own countrymen (staffs) and moving jobs to low cost destination in order to gain profit, but they do not understand (very surprisingly) that when they lay off one worker at the same time they kill one consumer, then how their business will survive without consumers in their country. US is world’s largest economy due to largest consumer markets only, if there would be no consumer, there would be no business. To save cost, US com shift jobs and render own people jobless then who would buy their products or services. Ultimately, the US coms are loosing in the long run. US coms should employ the other mecahnism to cut costs and increase margins in this tough econimic conditions, like giving discount and offers, reducing employees’ pay packages temporarily, instead of cash offering services or goods for the service taken from other business or employee, etc. etc.
From,
A Kumar
New Delhi, India