Offshoring is still a viable option for small and medium enterprises (SMEs) despite the public backlash. The truth is, it provides smart and flexible options for businesses. The masses may argue that it's all about greed and capitalism. But until you launch your own start-up or run your own retail shop, you can't really know what it takes to thrive in today's market conditions.
At the same time, this isn't an excuse for businesses to run on inexpensive labour. Here's how SMEs can deal with the realities of offshoring and outsourcing that affect them today.
Responsible Offshoring
A few weeks ago a garment factory in Bangladesh collapsed. This further confirms the pervading negative issues about offshoring and outsourcing - poor working conditions and inexpensive labour. The opposing groups have now more ammunition against outsourcing.
Keep in mind though, that outsourcing is a business process. How it is sourced and implemented depends on both the business process outsourcing (BPO) client and service provider. Arbitrage can be achieved, but with rising labour costs this isn't much of an advantage. Low cost doesn't necessarily equate to poor working conditions. There are offshore service providers with proper infrastructure and skilled talent that can be found with a rigorous selection process.
BPO clients who mainly focus on the bottom line are likely end up with shady deals. Quality and good working conditions come with a price. It is the responsibility of businesses, from start-ups to multinational corporations, to ensure that they are offshoring to a reputable and established service provider. Due diligence should be implemented at the start and throughout the duration of the offshoring engagement.
BPO providers also have to step-up. Buyers and the public have become more discerning about offshoring and outsourcing. Traditional service providers are already facing disruptive technologies such as cloud computing and automation. They need to invest in their capabilities if they want to shake off the negative image of offshoring.
It takes effort from both sides. Businesses and service providers should look beyond low cost efficiency.
Proper Knowledge Transfer
According to the Business Spectator, the RBC scandal is a good case study for Australian businesses who are outsourcing offshore.
The bank is facing a backlash when an employee publicly claimed that their jobs were being offshored, and they were forced to train the foreign workers replacing them. In truth, the number of jobs that would become redundant was relatively small – 45 – but the bank was using temporary foreign workers to replace Canadian IT workers until the job was offshored to India.
In less than 48 hours, the bank faced a federal government investigation on its use of temporary foreign workers, and an intense public backlash. A separate Facebook page called for a boycott of the bank and several jabs at their slogan - “Your child's future outsourced – lost Canadian jobs you can bank on”.
The scandal received a lot of attention because it was attached to a face, instead of the number. Businesses should anticipate their employees reaction, then implement a proper transition and knowledge transfer. Offshoring should not be used to get rid of a service, but to enhance internal efforts.There are Australian SMEs who benefited from supporting their in-house efforts with offshore staff.
The reality is businesses will always seek to provide quality services at a low cost – whether they're a buyer or supplier. But this should not be the end nor only goal. Change must come from both sides, or else the stereotypical image of corporate capitalism and overseas inexpensive labour will persist.
Post a Comment