The Outsourcing Expert

OUTSOURCING: Creating Jobs in North America & Ending Wars

OUTSOURCING: Creating Jobs in North America & Ending Wars

Reading Time: 4:40 minutes

For everyone involved in outsourcing, whether you are a vendor or a client, you have most likely been asked; “How can you sleep at night?” This of course is referring to the idea of taking jobs away from Canadians, and shipping them overseas.  Turn on CNN anytime in the last three years, and Lou Dobbs echoes his extreme bias opinions on how he feels about “Exporting American Jobs”.

There are a number of common misperceptions from the uninformed public about outsourcing practices. For one, what is outsourcing?  Do you know?  Most people astonishingly do not know anything about one of the greatest trends in business history.  Most would say that outsourcing is “shipping jobs overseas”.  While this is true, it only tells a small part of the story.

Here is a cold hard fact: EVERY business on the planet takes part in outsourcing.  To what length they go about it may even determine their success. Every business owner has had business cards made for them. Did they design and print them by themselves? Chances are, if they have a good looking business card, they did not! They outsourced that job. Same goes for package deliveries, advertising, lawyers, payroll, uniforms, the list goes on and on.  As you can see, outsourcing does not always mean “shipping jobs overseas”, it could mean something as simple as having the kid down the street cut your grass for you.

Definition of Outsourcing: The transfer of a business function to an external service provider.

Sounds simple. Heck, it even sounds logical!

So how is it that if a company outsources jobs to both local and oversea vendors, it strengthens not only the business itself, but also the entire North American economy?

Most people think that businesses outsource to cheaper labour markets in order to save money. While this is a great benefit, it does not tell the whole story.  For example, outsourcing helps the middle class more than anyone by lowering prices on such items like clothes & electronics.  An estimated 96% of clothing bought in Canada is made overseas.  According to the Bureau of Labour Statistics the clothing price index has been dropping steadily since January 1998.

Bill Prontelli, a business owner in California who was featured on the ABC 20/20 News show decided to outsource 50 programing engineer jobs back in 2004 in order to prevent laying off people from his company.  By outsourcing 50 programing engineer jobs to India was like paying the salary for maybe 20 employees in California. The money that was saved by this move allowed Mr. Prontelli’s business to expand, creating new job opportunities and preventing even a single layoff! In fact, to keep up with new demands, Mr. Prontelli had to hire an additional 9 people, and last 20/20 checked in, the average salary had increased!

This is not just one single outsourcing success story.  Companies everywhere who are taking advantage of outsourcing their non-core tasks are expanding, or at the very least, able to maintain their current employees without having to go through serious layoffs even in these trying economic times.  John Stossel from ABC News has even proven to naysayers like Lou Dobbs that companies that outsource overseas, hire on average, twice as many workers in North America than their counterparts.

Making the World a Safer Place

A few years ago, India & Pakistan were on the brink of a nuclear war. What happened next? The Indian business community went to the leaders of New Delhi and asked them to call for a ceasefire. Those leaders quickly got the message.  The Indian business community did not want that bad press and possible war while trying to provide services for North America’s top companies. Although problems are definitely still there between the two countries, it is nowhere near what it was heading for thanks to outsourcing.

This idea is very simple: Give someone an invested interest in something, and they will work to take care of it.  The more companies that get involved with outsourcing are making the world a safer place with that very principle idea.

Probably the greatest quote to sum up the importance of outsourcing comes from the first Prime Minister of Singapore, Lee Kuan Yew.  This man led the People’s Action Party to a landslide victory in 1959, oversaw the separation of Singapore from the Federation of Malaysia in 1965 and its subsequent transformation from a relatively underdeveloped colonial outpost with no natural resources, into one of of the four Asia Tigers with a gross domestic product higher than that of Western Europe or North America. His famous quote that rings true louder than ever before:  “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”

So for all of you business owners that do outsource, thank you for creating new jobs, and thank you for strengthing our economy & making this world a safer place for all. I’m sure you sleep very well at night indeed!