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Offshore Outsourcing
This is a topic that affects me in a large way. I work for a company that provides outsourcing solutions to large companies in many sectors of the economy. We operate globally, and therefore have huge resources of workers to choose from for the solutions we provide. However, in North America, we are paid very well, in comparison to our counterparts around the world.
In the short term, it makes perfect sense to provide the customer the service whatever means possible. Rarely, to my knowledge, is there any national protectionism for the jobs/work that is to be contracted out. The company looking to dump the work to the outsourcer is merely looking at their costs, and trying to better their bottom line. On the surface they will try to protect their workers from being chopped instantly upon the "takeover". However, the protection is short lived, if it is ever there to begin with. Most of these big deals will "protect" most of the staff for about a year. After that, everyone is fair game for being let go. Of course, it is under the guise of lay offs, but really, they are strictly cost cutting measures.
You see, if the outsourcer can do the work with less people, the contract now becomes much more lucrative. The ROI of a 3 million dollar contract begins to increase with every worker that is let go. Once the local knowledge is passed on, there is little difference between the systems/technology that runs the business. If you can support software A in Russia/India/Philippines from Russia/India/Philippines, for North America. The outsourcing company benefits because the wages paid the professionals in the foreign countries is far less than North America.
However the benefit stops there. As is pointed out in many of the articles about the subject, the technology jobs are becoming much harder to come by. The market is somewhat saturated. Once the employee is laid off, what then? Usually, the severance package received is decent enough to get you by for a few months, but what then? The competition is intense, and the technology companies are not looking to hire a very experienced techie. They want middle-of-the-road, in many cases, because they cost less, and are likely younger so maybe they'll stick around long enough to grow with the company. At any rate, the laid off worker is no longer able to spend on the products of the big companies, and, in the long run, the economy will be damaged by this sort of myopic vision. The distressing thing is, the companies, both the outsourcer and outsourcee, will realize some very good gains in the short run. The CEOs of the companies will collect their large bonus's for a "job well done" and then leave to go "save" another company. When the dust settles, the economic tide will have turned for the worst, the laid off workers will still be laid off, or working for a half or third of what they were, in a totally different field, and some other CEO will be left with the realization that offshore is not how to keep the local economy going and their own bottom line flourishing.
I for one am hoping that some of the protectionism the U.S. has shown for other industries will be put in place for the technology sector soon. We need it there, and in Canada.
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