Thursday, December 09, 2004

The New Face of Outsourcing

Here is a very interesting story about Europeans working in Indian call centers. They are working for Indian companies, making local wages, and apparently loving it.

Folks, this is the new face of outsourcing. In the future, if you love a certain job (okay, maybe not call-center type stuff) you willl have to go where that job can be performed at a world-competitive wage. Jobs that can be outsourced are likely to move where the labor is the cheapest in order to offer the goods and services at the lowest price to consumers and maximize corporate profit. Welcome to the brave new world!

Before anyone gets too upset about this, I should point out some obvious benefits of accepting this part of outsourcing. Many foreigners travel and enjoy living in other countries. Outsourcing allows them to take jobs that otherwise wouldn't be available to them. The travellers/expats benefit from this as well as the companies that would seek to employ them. Just think, those call centers benefit from having native speakers work for them instead of paying them to teach the workers English. The companies get the benefit of the foreigners presence because they will spread recent English usage to the Indian workers. This is a very smart move on the part of the companies. The spillover effects of hiring Europeans make it worthwhile.

Moving to a foreign country or just taking one of these jobs temporarily can be an amazing cultural experience, but the pay can also be pretty good. As the article mentions, these call-centers pay fairly low wages but what it doesn't address is the cost of living in India: it's very low. These Europeans can take a job that, to them, would be fairly easy (speaking English all day) and take advantage of the job perks to save money.

While these workers are probably younger traveller types, I predict we will start to see some slow migration patterns of Western workers moving to where the jobs are. It will take some time, but I predict that some people will choose love of a certain type of job over location and move accordingly.

I guess we have to wait and see.


Blogger dundare said...

This might be more of a long term trend than you seem to indicate, but I think you are on to something.

December 10, 2004 at 8:42 AM  
Blogger NetRealist said... time I talk about it, I'll emphasize that then since, as you say, it is definitely a long-term trend. In fact, maybe "trend" isn't the right way to put it since I think this is the way that things will simply be done from here on out. So your point is well taken.

December 11, 2004 at 8:45 AM  
Blogger dundare said...

Have you seen the new Thomas Friedman video on outsourcing in India? It doesnt address what you talk about specifically, but is an excellent video nonetheless.

December 11, 2004 at 11:46 AM  
Blogger NetRealist said...

Yeah, I caught it on CNN several weeks ago. It was a pretty interesting piece on outsourcing from the Indian POV. I only wished he'd gotten someone like Bhagwati to comment on the larger process. But providing a grassroots picture of outsourcing was a refreshing change.

December 11, 2004 at 3:07 PM  
Blogger anna said...

Very nice work on your blog, It was fun to read! I am still not done reading everything, but I bookmarked you! I really like reading about call centers and even created a call centers blog of my own if you are interested!

September 2, 2005 at 10:33 PM  

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