Choosing to outsource work to overseas companies involves much more than just looking at hourly wages. Numerous additional factors must be considered such as quality, cultural differences, public perception, language barriers, accents, geographical boundaries, political boundaries, workforce education, training, and technological hurdles.
Interestingly, India isnt the automatic target for outsourcing anymore. John Helyar with help from Mehul Srivastava report on the latest outsourcing trends with respect to countries other than India. Hourly wage is a definite consideration but other factors are equally important. (Outsourcing: A Passage Out of India. Bloomberg Businessweek, 3/19/123/25/12, pp. 3638).
For example, American companies are increasingly shipping higher-level jobs offshore such as accounting, research, and fiscal analysis. These job functions require a larger business-context understanding and more significant client interaction. This has spurred growth in outsourcing facilities in such areas as Eastern Europe and Latin America. One of the main reasons is the surplus of English-speaking, higher educated workers.
An entry-level accountant job outsourced to India will pay $11.22 per hour compared to a USA-based worker at $23.00 per hour. Nevertheless, that same worker in Costa Rica will command $18.85 per hour and in Argentina $19.90 per hour. These wages are still cheaper than the American worker, and the outsourced workers have the desired language command and business knowledge.
As I have observed in prior posts, business globalizations irreversibility has thrown us all into an entirely new world. Decisions about where and how to do business require a thorough consideration of all factors. Wages and who gets the job are just two factors among many.
One size fits all does not exist. In the future, the companies that achieve maximum success and prosperity will be the companies that fully analyze all factors before making outsourcing decisions.
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