To be more specific, the title should read, “Outsourcing; The Consequence of Professional Consumers” but it felt a bit long-winded. Anyway, the question of outsourcing never seems to leave the front page. Indian news media generally opines on its positive influence on the Indian and World economies whereas US media is the opposite, generally favoring a negative approach to the subject. I thought I’d chime in with my thoughts.
Most of the people I know from the States are against outsourcing simply because of unfavorable news coverage, some supposedly informed person said so or perhaps because someone lost their job as a result of it. Kind of a shoddy way to determine your stance on an issue me thinks. Let’s take a step back and look at how the outsourcing train left the station.
We live in an age where everyone expects everything to be on-time, available all the time and perfect when availed. Take customer service for example (for your cellphone, credit card, 32-in-1 blender, etc.). Everybody (myself included) expects that customer service be available any time of the day (even 4 in the AM when you’ve just got home from the bar and realized you can’t get in touch with your booty call). Furthermore, we all expect not to wait on hold for an eternity listening to muzak. Finally, we all expect that customer service is gratis; That is, it is a service included free of charge with whatever product we are using.
It’s safe to say customer service can be a pretty lowly job in the scheme of things so let’s look at an American thus employed. He or she wont be making a decent living, customer service isn’t (and will never be) renowned for its fat paychecks. It’s back office work, really, I mean the product is already sold so it’s just a matter of keeping the consumer more or less happy at this point. So, the American isn’t really pleased he’s making a paltry 12 bucks an hour (the service is free after all). Now let him know that because of the nature of the job, he’ll have to work shifts, some during the day, some during the bumfuck hours of the night, 6 days a week (so that the call center is continually staffed to its maximum, ergo lesser hold times and around the clock service). What we end up with is one very pissed off, poorly paid, sleep deprived American worker. Soon he or she talks to the union (or worse, the lawyer) and it all comes to a head.
Now the company has to shell out big bucks to keep the employee happy, cut back his hours, include additional health benefits and psychological counseling and hire more staff to make up for the deficit. Meanwhile, the customer (who may very well also be an employee) still demands the same level of support. As a result, profit margins suffer. Next-gen products consequently suffer quality setbacks as a result of cost-cutting measures (which means more people are calling the now happy and well-rested customer service rep and availing of the warranty). Consumer confidence in the company eventually falls on the back of shoddy products. Mounting warranty repairs, civil suits and settlements (that phone blew up in my lap!) further erode profits as do increasing employee healthcare costs. Soon, losses overtake profits and the company goes into a downward spiral. The stock market value plummets, investors pull their funding. Old CEO is fired and new CEO promises job cuts to restore former glory to said company. The happy, well rested, well paid customer service employee is now laid off as management decides to focus on key areas to restore business growth and profits. All the time, consumers never cease to demand the same level of customer support as before.
An aside: Ok, so I took the worst-case scenario to illustrate my point but you get where I’m coming from right? Let’s continue with the fairy-tale.
Thus dawns the realization that the only way the company can make it out of this alive (and thereby continue to exist and continue to pay its existing workers) is to rapidly shed costs while maintaining the acceptable level of service. Logically this means the same job has to be done at significantly lower expenditures. Can’t give it to the American worker, he or she will demand the same remuneration/benefits that got the company here in the first place. Better to pick someone on the beneficial side of the currency exchange (i.e. third world country), someone who is hard working, educated, speaks English and is happy to have a job no matter what. Besides, it’s just customer service, let’s send the jobs to India. Service level is maintained at lower costs. Newly available revenue is reinvested in R&D, quality control and marketing. With the advent of new products that excel and a slick advertising campaign, consumer confidence slowly returns as do bumper profits. Existing employees get bonuses and raises. They then invest in buying a new homes, gadgets and cars. General Motors is happy someone is buying their cars. RE/Max is happy the housing boom isn’t dead. Motorola is happy people want a RAZR just for its looks even though it’s a shit phone. Ancillary industries also benefit allowing them to pay their employees better, further boosting the cycle of regeneration. Parents, now better paid, invest in their children’s educations realizing that when they grow up, they wont be able to work as customer reps. Instead they’ll have to be business leaders, innovators and scientists. The US remains the greatest country in the world.
Ok, so again, I used the best case scenario to illustrate my point, but you see where I am going right? The concept of outsourcing is not to screw people over. It’s to help everyone on both sides of the equation (I shouldn’t have to go into how Indians benefit). There’s better business for everyone and more (NOT less) employment for everyone. Keep in mind, the jobs that are outsourced first are the shit ones. Almost everyone benefits except for a minority who don’t have the skill set to move on to bigger and better things. How do I know it’s a minority? Well, logically, it has to be otherwise entire companies would move overseas and the backlash would be so fierce, outsourcing would stop immediately (instead of increase as is the trend).
What of the employees who lost their jobs? Well, I don’t want to be a hardass about it but they fell to the wayside because they couldn’t keep up in an ever changing, dynamic world. This obsoleting of a certain part of the workforce has been the case since time immemorial. Nothing has changed in that respect. Education remains the bedrock upon which a foundation can be built to avoid this. That’s why there should be a general alarm in the US that the kids aren’t doing so well in Maths, the Sciences and so on as compared to elsewhere. It bodes poorly for the future.
Sure, the Indian guy named Jim in Bangalore might have a strange accent, be hard to understand, have “stolen” some American’s job and even be off-putting somehow but let’s not forget that you, the consumer, put him there. He exists because of your insatiable needs as a modern, efficient and demanding consumer.
You see, you can’t fight the Man if you are the Suits. Comments, counterpoints?
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