Outsourcing Jobs to Foreign Countries: What are the Real Dilemmas?

The outsourcing of jobs to lower waged countries has a positive long-term effect on the United States economy and jobs; as well as a harsh affect on already stabled workers in the United States.

What is outsourcing? According to Nelson King, “Outsourcing means having IT work (programming, call center, tech support, design etc) done by workers in other countries, often through some kind of intermediary-specialist companies that facilitate the work”. “The work is sent to other countries because it can be done for less money” (King, 2003, p.1).

Will shifting jobs to lower-wage countries-a form of off shore outsourcing benefit the United States economy in the long-term? With the outsourcing of jobs to other countries many US workers find themselves out of work. How does this truly help our economy? Less jobs here in the United States and less products made here cause me to think that outsourcing may not be the way to go.

Many companies outsource to benefit their needs. What are the risks involved with outsourcing? Do companies need to outsource? What about the average Joe who is trying to support his family and has been at the same job for years? Joe depends on his pay check that has increased over the years with raises and time that has accumulated at years on his job. What happens to him when he looses his job to someone in India who is getting paid much less money to perform his job now?

As time goes on companies in the United States see things a different way. In the Controller’s report a recent study from “Financial executives International” explains, “the primary reason companies outsource is “not a core competency’ mentioned by 455 and “cost in too high”. (35%)” (The Controller’s Report, 2007, p.9). According to the above study it is also written that “Companies outsource processes that cannot be done well-in-house and or those when done in-house have costs that are too high.” (The Controller’s Report, 2007, p.9). Also itis stated in this article is; “controllers who have outsourced one or more areas consider their arrangements successful” (The Controller’s Report, 2007, p. 9).

According to Martin Schuchman, “small and midsize businesses need their core communications services to not only be reliable, but also to be available anywhere and anytime” (Schuchman, 2006, p. 18). The above article states that “SMBS use outsourcing use outsourcing to alleviate the headaches and management of upgrades, network maintenance and support” (Schuchman, 2006, p.18). “Outsourcing also offers comprehensive physical, network, and application-level security”, according to Martin Schuchman (2006, p. 18).

There are so many aspects to outsourcing. Does the United States gain more monies from outsourcing jobs elsewhere; to have them done by people we don’tknow, and cannot supervise properly?

There are numerous problems with outsourcing. Common sense is that one of them is language. I certainly would have difficulty learning the needs of a job when someone is speaking a different language. When there are different countries; there are different languages. Here in the United States communication is simple. The English language is the dominant language. Understanding the facts of a job needing to be done is much easier when speaking the same language. Ideas and thoughts are less likely to be misinterpreted thus the job has a much better chance at getting done correctly. I believethis is common sense.

Outsourcing is a form of global trade. As with anything else that is under development, there are always risks involved. According to an article written by Andrew I. Sicilliano and Douglas P. Zuvich, “As global competition expands, companies are exposed to myriad risks related to their international trade activities.” “New opportunities overseas, increased government scrutiny of exports due to heightened security concerns, a surge in special trade programs and increasing trade activity make 2007, a year in which businesses will need to manage these trade risks more than ever before”( Sicilliano, & Zuvich, 2006, p. 53). “Trade risks is not as simple to manage as other business risks, given the number of government agencies involved and the fact that every transaction may be subject to numerous regulations”( Sicillano, & Zuvich, 2006, p. 53).

“CPAS should make companies aware that trade risks may arise even when there is not a purchase or sale transaction” (Sicilliano, & Zuvich, 2006, p. 53). CPAS (certified public account specialists) need to identify risks for companies and address the underlying problems not known by the involved companies. In my own opinion maybe the CPAS should think about the families that are involved in the triangle of outsourcing also. Families are so unprotected by all the loss of monies within their family units in the United States. As for reality the CPAS are only for the large companies if they do their job properly. As for the average person out there trying to survive, he or she is basically on his or her own. Wouldn’t you agree?

Quality control again in affected by language barrier as well as management control. Imagine speaking to someone 4,000 miles away concerns regarding a product. Imagine this person hardly speaks English. The expense is surmountable; to have an American on site to oversee the quality control, and manage the products or jobs being done. And this;involves time, and distance. Distance affects the ability to manage a product or service and difficulty for logistics and quality control (King, 2003).

Another dilemma is other countries understanding laws. Some countries do not recognize copyright law. Also Terrorism and instability are part of the set backs experienced in outsourcing. If it is so unsafe then why in the United States doing it in the first place (King, 2003)?

The effect of the economy with the loss of jobs in the United States continues with productivity changes, along with risks of outsourcing involved. “Outsourcing from the United States economy is generally for low-value jobs, like back-office operations, phone centers and data entry” (Bhagwatti, Panagariya, & Srinivasan, 2004, 93-114) . “Outsourcing means that the United States economy loses low-wage call centers, but gains high-wage hobs in medical, legal, and other services.” Bhagwati, Panagariva, & Srinivasan, 2004, 93-114).

So, here is the average Joe’s dilemma again. If Joe loses his job and his wife is having a baby, what does he do in the mean time? His job would be hard to replace. Does that mean he goes back to school? How does he support his family?

Outsourcing can be ideal for the future; but weas Americans should think of the standpoint of today. Tomorrow has problems of its own. People need to feed their families in the United States.

According to Murray W. Baum, “outsourcing and the savings it generates are the beginning, not the end of the adjustment process”. “Cost reductions from outsourcing can open up new market opportunities for US companies and thus generate additional jobs here at home.” (Baum M., 2004, p. 35) “As poor countries overseas develop their economies, new markets are created for US made products and services.” (Baum M., 2004, p. 36). “While direct manufacturing employment has been declining, total US production of manufactured goods has risen about 405 over the past decade” (Baum M., 2004 p .36).

The opinions of the press along with statistics give us all an overview of outsourcing. But where does outsourcing lead us? Today we need our jobs. Considering all the wonderful outcomes of the future; how can we enjoy them; if today we can’t support our families and afford to eat a decent meal?