Will Offshore Outsourcing Help Your Business?

Philosophically, you may believe that as resident of an affluent western country, you have a responsibility to the rest of the world, which might include helping people there earn a sustainable income. Your principles may be stretched a bit when you have to call for service on your phone or computer and find that tech support has been outsourced to a foreign country. You wait forever, only to reach someone who responds in broken English, does not understand what you are talking about, and does not always have the answers. Welcome to the downside of outsourcing overseas. Before you consider doing it for your business, there are several issues - including many downsides - to consider with offshore outsourcing using foreign workers.

Can outsourcing give you what you want or need? Customer service is only one company function that is often outsourced to a worldwide pool of workers who are promoted as highly skilled, yet cheaper than American or Canadian workers. According to Living Economics, English speaking workers in Ireland, Jamaica, India, and the Philippines are often hired to perform services that include basic clerical, accounting, customer support, legal services, software design, and programming, scientific research, and pharmaceutical development. Richard A. Hall adds that art and animation, data analysis, engineering design, research, and even U.S. Medicare is handled abroad.

Will it really save you money? The cost saving can be impressive. Money talks for the Fortune 500 companies; 186 outsource to India. A recent Forbes study cites that a programmer who earns $50,000-80,000 plus benefits in the U.S. might command $5,000-8,000 in India and be considered high paid. (India is now considered "high-cost", so some less complex work is outsourced to China.) Other studies indicate you can lop a third or more off customer service salaries.

Are there other benefits? Aside from the considerable savings, companies feel they are getting more reliable workers, who are happy to have the jobs. The time difference often allows American workers and Far East workers to work on the same project at different times of the day. With outsourcing, you have an amazing pool of workers at your disposal.

What are the downsides in work quality? You want to make the foreign outsourcing seamless, but the language barrier is often apparent with customer service and very aggravating to customers. The workers may technically speak English, but may have accents and inflections that are hard to understand. Whether they understand the North American customer's issue or not, the customer perceives they do not and are dissatisfied with the service. This phenomenon is leading some companies to seek help in the Philippines, where the spoken English is closer to what customers are used to.

If you outsource writing and editing, you find that the work produced by foreign workers has good grammar structure, but awkward word usage, lack of correctly placed articles, and clumsy phrasing can make it clear that the work was done else. You will have to determine how much having the work reedited locally will eat into your savings, or your credibility, if you post the work without reviewing.

When you outsource, you lose a certain amount of control. If workers do not deliver or do a poor job, you have no power to discipline them or encourage them to do better. If they do a good job, you have little assurance that a good worker gets the credit.

Economic issues of downsizing. When you use offshore outsourcing, you may positively affect your bottom line, but you affect the bottom line for local workers too. On the one hand, you may be able to keep your prices down, but some workers will be unable to afford goods and services they need. Even if this doesn't affect your local sales, but the rest of the local economy might be affected.

The real bottom line. You may determine that offshore outsourcing is in the interest of your business, but proceed carefully. It is probably here to stay, but if you are considering using it in your business, you need to go into the arrangement with your eyes open. You gain access to good workers, but risk harming your area when workers leave for opportunities elsewhere or cannot afford the cost of living in your city. Using foreign workers can save you money, but cost you support from your own workers, as well as from customers.