Indian Outsourcers Face Labor Shortages, Increasingly Hiring Abroad
from the how-quickly-things-change dept
The emergence of the Indian outsourcing boom caused a lot of concern initially among American workers and politicians, worried about jobs. But it wasn't too long before it became clear the addition of more skilled worker, in technology and services, was a positive development, and that the market was capable of correcting any short-term pain. Still, the industry continues to change; the New York Times has a pair of articles today about some of the challenges facing Indian outsourcing firms. One of the big problems is that contrary to popular mythology, there's not a never-ending reserve of highly-educated, English-speaking workers. Though we often hear about how many engineering graduates come out every year in India, many of them are not sufficiently skilled so as to be employable. That problem is in part due to problems in the education system, particularly at the higher levels. Another interesting development is that these firms are increasingly courting employees abroad, including some from the US. Some of them will work in India, in management roles, while in other cases these outsourcing firms are feeling the need to beef up their physical presence in the countries of their clients. You could call this the reverse of the brain drain, the phenomenon whereby top talent from developing countries often comes to the US for opportunity, but what it actually shows is that national origin of countries or employees is increasingly meaningless. And next time some economic events cause you to start panicking, perhaps you should wait a few years to see how things unfold.
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New world order
The second country is those who have fallen short in one or more of these areas, but can hope to get there with some effort. A lot of the people who lose their jobs due to outsourcing fall into this category, but can recover with some effort.
The third country is those billions who are simply struggling to survive, and have a really long way to go to get anywhere.
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Re: New world order
...
You forgot the fourth: the lepers.
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I said it B4
not being racist by any means, but when customer service picks upa phone in a foriegn country, they do not understand our slang lingo and expressions, and we do not understand theirs.. that gets frustrating ona simple customer support level
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However, I am still having a tough time understanding how outsourcing has helped the American workforce in any way. I can understand the marginal impact of making products more inexpensive, but if you aren't employed does the price of something really matter?
I'm not an economics/business person so some insight would be enlightening.
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Re: I said it B4
To try and sound like they are part of the culture and can follow along in an informal conversation.
Not that I've ever actually seen this work.
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A Quick Fiscal Policy Primer
a) Subsidise it,
b) De-regulate it,
c) Tax its alternatives,
or d) Regulate its alternatives.
If you want LESS of something
a) Tax it,
b) Regulate it,
c) Subsidise its alternatives,
or d) De-redulate its alternatives.
In this country we tax those who work, those who supply jobs, and subsidise (via tax breaks) those who export jobs and effectively de-regulate (i.e. not enforce) those who hire illegals.
Therefore: we have fewer jobs (especially in the tech sector where this is especially the case).
True, you will get more and cheaper goods from the cheaper lobor, but the question always missed by economists is "What makes people happy?".
One of the basic economic assumptions is: More (and cheaper) goods and services make people happy. The problem is: This isn't true. If you ask Psychologists and Sociologists (the people who actually study what makes people happy) you come up with a somewhat different answer, namely: WORKING to acquire those goods and services.
Therefore, I suggest, we're promoting ing the wrong thing. Instead of the goods and services, we should be promoting the WORKING for goods and services (i.e. jobs).
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Re: A Quick Fiscal Policy Primer
If you see a wave coming, you can choose to either
a) ride it and have fun
or
b) fight it and take your chances. If the wave is small or isolated, you might be able to fight it. If the wave is large or persistent, you are better off riding it.
So the question is: Is the outsourcing wave an isolated and weak wave or a large and persistent one? I think you know the answer.
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Some Numbers
1% of India's population -> 10,000,000.
There are definitely long term benefits in using the technical services from countries like India, but there is a short term impact, and a very severe one, considering the hordes of Indian firms who are racing to fill every possible cheap engineering job from there.
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india sux
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Re: Re: A Quick Fiscal Policy Primer
Cost of living is dirt cheap.
You don't spend years and years wishing and hoping for a position in management. India seems absent of the type of job politics Americans contend with. So opprotunity for advancement is better
If you make under 60K you don't have to file taxes backe home. I THINK. Don't quote that last one.
If I was still single, I'd take off for India in a heartbeat.
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They are persisting with outsourcing buthave gone down two roads. The first is to bring a lot of the offshore resource onshore so they can be better trained and the second is to send a bunch of managers to India to manage them directly.
My personal experience with outsourcing is it really wont work unless the people you use are actually experienced and competent. Their cheapness does not make up for a lack of experience. Second several companies in the UK now boast the fact that their call centres are UK based, and guess what? They are MUCH, MUCH better than the offshore crap centres.
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Plenty of Jobs
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Re: india sux
To the facts. America is losing jobs and we are blaming it on outsourcing. Interesting argument, and based on IBM, Dell and other technology leaders moving call centers abroad, a fairly decent argument. But is the problem really a technology problem or is it more. Look at the “big three”…..Oh wait, Ford and Chrysler are not on the list. The problem is that companies and corporations can’t compete with the rest of the world in manufacturing and labor costs. A good worker in China who makes screws or nails or something like that makes $0.50/hour or less. The same employee in North America, with the backing of a union might make $15.00/hour. How is the North American manufacturer supposed to compete with this? Well the American companies have finally realized that without the aid of government sanctions, they can’t compete. They need to find a way to manufacture in China and market in North America. If you want to beat your enemy, you better be able to do what he does, but BETTER….and clearly that’s not what we are doing. The India and other countries repatriating our call centers and tech supports issue is one of labor costs, purely. There are places in North America where it is cheaper to run a call center than others, but none of them compete with the other parts of the world. The accent is an issue but the savings outweigh it 10-1. If you but a Dell and call customer support, you deal with the accent, the same as a northerner dealing with the southerner’s accent, it’s adapt and overcome plain and simple, if you don’t like it, sell your Dell and buy an IBM….Oh wait, that’s the same issue. Facing that call center and tech support jobs are leaving the country is the first step. Overcoming it is the next step. Ask yourself no why that person in a foreign country took my job, but rather ask yourself, “how can I meld my skills and make myself irreplaceable to the employer”. Life will go on, it’s how we adjust to our new lot in lot that will make us the bigger, better people.
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re: Plenty of Jobs
It's close to the way the market works for illegal drugs. With sufficient demand, the dealers charge what they want, and if you get a raw deal, too bad--you certainly can't go to the cops. You can retaliate on your own, though. Same with in-market competition: the solution to your competitor's unfair business practices is to kill him.
Further, it seems that you're assuming that--oh, wait. You're a troll, aren't you, Sal?
Never mind.
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Re: Plenty of Jobs
- Lawn mowing: use your technical skills to develop an automatic lawn mower or popularize synthetic lawn or develop organic lawn methods
- Burger flipping: Develop a way to market healthier burgers or develop recepies for garam-masala burger and sell it to the Indians for a profit!
- Mushroom farming: Do some genetic experiments to figure out better quality / higher productivity / more nutritious mushrooms, and so on.
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Call center outsourcing doesn't work
Some industries make sense to outsource, and some don't.
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Re: Re: Plenty of Jobs
- Prostitution: Become a pimp.
- selling drugs: making drugs.
-begging on the corner: organize a consortium of corner beggars and standardize the industry, lobby for health benefits, and study begging-related repetitive injuries, like carpal tunnel from jiggling the change cup for 8 straight hours. Also, you can fight for the federal gov't to pass a minimum hand-out wage so people won't be able to throw in just a few cents.
sitting around reading techdirt all day: go the hell outside!
X
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You know those jobs were already outsourced once!
The rhetoric back then was the same.
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Quirk of the English Speaking World
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Re: Re: india sux
“how can I meld my skills and make myself irreplaceable to the employer” LMAO @ U
whatever - dream on gutless puppet
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English
And here's the funny thing.
They don't always understand me either.
The b.s. I always hear when someone argues about this is, well Americans are lazy pigs because they only know one language. We're arrogant and we demand everyone know our language rather than learning another one, whereas in Europe or other areas of the world, people commonly know two, three, heck sometimes upwards of five languages.
Perhaps that's true, but the issue isn't so much how many languages can you learn, but HOW MANY LANGUAGES CAN YOU LEARN WELL.
The issue is that stupid call-center companies hire someone for being bilingual, when they're not really bilingual. Just because I took a couple years of Spanish in high school and can order at a Taco Bell does not make me qualified to work as a bilingual call-center operator in any Hispanic country or culture.
Similarly, just because some non-U.S., non-English speaking persons have taken courses in English and have achieved a minimal level of proficiency in the language, that should not qualify them for call-center work in American businesses.
The real issue, to me, is not that Indian people or any other people are applying for so-called "American" jobs, but that American companies are lowering their standards by hiring people who are unable to effectively communicate with their customers.
Like I say, it's not a nationality thing. I would be just as horrified to call tech support and get some redneck named Cletus who I couldn't understand because he was uneducated and talked funny because he had a big chaw of tabbacky in his mouth.
I think people are far too quick to label someone "bigotted" when they complain about getting an unintelligible person on tech support, when really the issue isn't a racial or nationality issue at all, but simply one of communication.
What's more, because this has become such a hot issue, if you're actually on the phone with someone you can't understand, people of "harassed" nationalities or cultures have more than once gotten NASTY with no provocation other than a simple, gentle request to have them repeat what they said.
Q: "I'm sorry, I didn't understand that last part. Could you repeat it?"
A: "YOU DIWTY AMEWICAN ATO PIG - YOU THICH YOU THO MUH BETTA - I THED REBOST! REBOST! YOU NO I THED REBOST! IF YOUD STHOP BEAN THUCH A PIG REED AWEADY BEDUN RITH THITH CAW! GO THINED REBOSTING THUMBWARE ELTH. "
Whatever.
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Re: English
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Geoff
You really are a gutless piece of crap. I bet your boyfriend beats you.
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Re: india sux
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re: Germany
"The outsourcing phenomenon has mainly affected English-speaking countries. For the foreseeable future, countries that speak other languages will be immune to that type of outsourcing. Few people outside of Germany speak German, few people outside of Japan speak Japanese."
Not true - about Germany at least. I've been working for 2 years in an outsourcing center of HP (Sofia). We provide support to German-speaking countries (for Proliant/Integrity servers/HP-UX etc). Let me tell you, outsourcing is _the_ trend in Europe right now - many tech support jobs are outsourced to Bulgaria/Romania/Ukraine/god knows where in Eastern Europe. I think the main problem with outsourcing though is the fact that initial savings are always hugely overestimated by managers. In the long run it is vastly more expensive to outsource any business. Like here is an example:
1) Business A decides to move abroad. Severance payments have to be paid.
2) Hiring and training people at the new location (this is a huge expense btw), renting offices or even purchasing property.
3) Inevitably, a part of the customers pulls back - this has nothing to do with xenophobia - some people just prefer to be understood _all the time_ when they are saying something, and not just guess they are being understood. So this means an inevitable drop in revenue.
4) Above three factors initially get offset by the lower wages of the workers. At least for the first 2-3 years. Then things always follow this path:
5) Wages in the country slowly rise i.e. cost savings slowly diminish. People who have worked longer must be paid higher, or they would leave.
6) It turns out (oh whata surprise) that there are many places (like poorer regions) in the country of origin (USA, Germany) where young people exist, who would be willing to receive comparable salaries to do tech support. So:
7) With cost savings almost non-existant (and revenue at an all-time low) managers have to make a decision in about the 5th year of the outsourcing venture: Either move to another low-cost destination or get back home. Choosing the first option obviously takes us to point 1) so... You get the idea.
In the end, companies lose customers, have to pay a whole lot of "additional" (unforeseen - they are always qualified as unforeseen, funny as it is) expenses, have basically abandoned people who conscientiously worked for them many years only to move back without having achieved a thing. Plain dumb.
My opinion on the thing is: don't outsource. Dumping people who have worked for you is mean and effed up. Look at countries like Sweden or the other Scandinavian countries - that's a brilliant example of running one's economy in a reasonable manner.
Man, I could write a book about outsourcing :) Been there, seen that :)
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