Outsourcing Versus Offshoring
Election time is near in the United States, and familiar rhetoric is in the air. This is a time in which political candidates at all levels take a stance that favors job creation in their jurisdictions. While creating jobs is an excellent goal to which all political leaders aspire, in recent years, the job-creation discourse has branched out to include job retention—keeping jobs on our shores. Where the discourse veers off topic, however, is in pointing fingers at organizations that outsource some business functions. Perhaps there was a time when outsourcing and offshoring were inextricably linked, if not synonymous. But today, outsourcing no longer has to mean shipping jobs offshore. The dynamic has changed due to factors including evolving labor costs around the world, developments in infrastructure, and the increased willingness of elected officials to work with outsourcing providers.
Businesses generally have outsourced to achieve cost savings or sales increases, and to offload certain corporate functions outside their core skill set. Although outsourcing is not new, a recent trend finds companies in many industries are outsourcing without offshoring. The jobs are staying in America, but instead of being performed in-house, are done by a domestic outsourcing partner.
Outsourcing partners have become an increasingly attractive option in the U.S. over the past few years. Rather than offshore a business function to a provider halfway around the world, many U.S.-based companies are looking to maintain greater control by creating onshore relationships with outsourcing partners. Such relationships offer clients many advantages, including an enhanced end user experience, complementary time zones, good infrastructure, and a strong cultural affinity. Research demonstrates that customer satisfaction scores are high when callers are interacting with agents who speak the same language (often with a similar regional accent) and cultural context.
As the president of one of the largest outsourcing companies in the world, I speak from experience. Our company has created jobs in the U.S. for nearly 30 years. Today, we have more than 5,000 employees throughout the country, and we are among the 10 largest employers in nearly every U.S. city in which we operate. Many of our leadership teams at our U.S. locations are lifelong residents of their communities. Such deep roots aren't going overseas. In fact, we have pledged to create 4,000 additional jobs in this country over the next two years, and are well on our way to achieving that.
Job creation and retention can be found in diverse places. Two of our contact centers are located near U.S. military bases, providing access to veterans and their families. This is a highly motivated, educated, and experienced workforce that delivers strong cultural affinity. They have typically had the advantage of living in many parts of the country as well as overseas, and may also speak in a neutral accent. Smaller cities can also be fertile job creation grounds. They offer availability of talent at a lower cost and low attrition rate, affordable real estate, local government support, high community involvement, and a better quality of life. A recent report by KPMG stated that taking operations to a Tier III city can save a company up to 30 percent in labor costs.
Our philosophy of "citizens serving citizens" focuses on serving customers from delivery centers based in their own markets and employing people from that culture. Although this approach is still considered outsourcing, the work is being done by a partner on the same shore.
What can be done to create jobs in this country? Businesses that choose to outsource should seek an outsourcing partner that operates in their region and provides a level of care for their customers that they are not providing internally. Their global footprint should match the business's comfort level with the location of the engagement.
Elected officials can help by offering financial incentives, removing barriers to competitiveness, and promoting training programs to help workers augment their skills.
When you focus on citizens serving citizens, you create jobs for Americans and keep jobs in this country.
Sandip Sen is the global president of customer life cycle management for Aegis. Prior to this appointment, he had the dual role of president (Americas) and global chief marketing officer. Previously, he was the founder, CEO, and COO of one of India’s largest domestic call center companies.
Companies that cut costs on RFP consultants may pay a high price.
01 May 2012
IVR system decision makers weigh factors across customer entry points.
01 Nov 2011
Some job titles are better outsourced overseas than others.
03 May 2010
In a report published today, market analysis firm Datamonitor found 47,000 customer service agents work from home worldwide, and expects this number to rise to almost 224,000 (a 36.4 percent increase) by 2012.
27 Sep 2007