Lack of Skilled Labor — Not Costs — Top Reason for Offshoring

Originally posted by grrrrrrr
...on a goverment contract....

That might say it all.

reply to post by bigfatfurrytexan

The first biggies to do this were WalMart and IBM. WalMart did it to get lower prices and IBM didn't need the higher profile as they were already International, and I'm damn near sure they did it to save money too. What you say may be the case for some. As an overall theory, I'm not sure yet that it holds a lot of water. Need to think about it some more.

As far as I'm concerned if these CEO's wanna keep selling the American worker out to forign countries maybe they should go live there. Why should they continue to prosper while the rest of us suffer for thier deeds?

Capitalism at turned canibalistic and greed as taken over. With a billion people these CEO's wont be laughing when the Chinese finally decide to go to war. They'll be eating our dogs and shooting our children.

reply to post by wantsome

True. But don't they all have homes in safe havens? Many of them in the same countries they stash their money in. The money they don't pay their share of taxes on. Betcha they're not worried about it one bit.

Complex subject.
Yes, manufacturers want to lower their costs to stay competitive. That is not only good business, but it is also a matter of survival. So, given the ability, a manufacturer will move operations to where the firm can acquire needed labor at a cheaper rate.
Walmart was built around cheap goods. People like cheap goods, that is why Walmart became the largest retailer in the world.
It is easy to blame the manufacturers, and in many cases, they deserve blame. For instance, when they lobby our government for special tax breaks while moving jobs overseas.
But, WE share the blame as well. WE don't have to be "consumers" at all, at least, not at the level that sustains the injustices that we experience. We empower them through our appetite for the crap they sell, and by our ignorance on how they are able to provide these things so cheaply.
Like using child labor, and slave labor. If you are forced into a factory to survive, and you are forced to work long hours seven days a week to survive, you are a SLAVE.
We have to redefine ourselves if we want to change the reality in this world. Those of us that are Americans are largely to blame...we spend and spend, and look the other way when our government exports corruption and a perverse form of crony capitalism around the world.
We get a cheap gadget and a cheap banana, but soon we will be able to afford neither.

reply to post by Stewie

Yes, we are partly to blame. So is the government who didn't think through the consequences of an eroding tax base and protecting our own work force. As for the corporations themselves, they're just doing what they are wont to do. Go after the money. It's not their fault that consumers are suckers not thinking through the consequences themselves and that the government is corruptible. We don't have to support these corporations, but enough of us do to allow them to continue their practices. The only way we have power is if enough of us recognize it and actually do something for a change. Don't hold your breath on that one. People are already winding up slaves to the corporations or beholden to the state and still don't realize.

In a nutshel per se: the reason these corporations are going overseas is that the American tax base-IRS for these companies to make a profit is entirely to high!

Thus, it is cheaper to build a brand new installation-rekey-and start off in a country that does not ask for over 47% percent of your profits

Originally posted by liejunkie01
I am sorry, but the conspiracy in me screams disinfo. I am in college right now. The classrooms are full. I believe that this article is a diversion tactic to take the spotlight off of the money saving issue.

Just my 2 cents.

edit on 14-2-2011 by liejunkie01 because: b

Yup, my thoughts entirely.

What a cop-out. I'm sorry but it seems blatantly obvious the true reason was/is to maximize profits by employing a cheaper workforce elsewhere. In the UK it was done through immigration [there are no industries left to out source], but there the emphasis was directed specifically at an unskilled [and cheap] imported workforce.

Originally posted by ~Lucidity
reply to post by bigfatfurrytexan

 

The first biggies to do this were WalMart and IBM. WalMart did it to get lower prices and IBM didn't need the higher profile as they were already International, and I'm damn near sure they did it to save money too. What you say may be the case for some. As an overall theory, I'm not sure yet that it holds a lot of water. Need to think about it some more.

I can only give my own experience, running a call center that outsourced to Time Warner of NYC, AOL, and T-Mobile. We lost all our business to places like Teletech, West, and Convergys because they could market off shore solutions. In the outsourcing call center business, it is mostly vanity.

Of course, there is no silver bullet. Money has a big role, too. Lets say that you are Dell, and you have 10 million customers. Of those 10 million, half are business, half are personal (just making up some base numbers here). My business accounts are my prime. My bread and butter. Each business account will buy several units a year. And you have professional IT staff making the support calls. So this business stays on shore.

That leaves personal customers instead. You don't want to create a fully negative experience, and aim for say, 80% quality (customer satisfaction) scores. This would mean that you could feasibly outsource 1 million customers worth of calls to another country like India, and still meet your own objectives for customer satisfaction (even if you do sacrifice a little).

The deal is, in the US those calls will be handled for about 75 cents per minute (the "handle minute", but we won't differentiate between "handle' and "production" minutes....it comes out to about the same in the end). In India you can have that same call handled for about 25-30 cents per handle minute. If those 1 million customers generate 2 calls apiece, at an average of 5 minutes per call, the difference in cost is about 4,500,000. And Dell has a LOT more customers than just 10 million (and their call time is closer to 7 minutes, i believe)
.

This is the decision that Dell made in 2004 or so. And it saved them millions of dollars, although the cost to their reputation has been a lesson for many companies ever since. You would think that AOL's decision to move off shore to India (and the subsequent dive bomb in their value) back in 2002 would have been lesson enough.

reply to post by bigfatfurrytexan

Yes, it is generally a decision made at the cost level. Your example of the call centers is a good one, and your experience that the real costs are basically a wash is also valid; however, when the business case goes forward, 9 times out of 10, all they look at is that line. It makes them see $$$

As I said before: it isn't a lack of education or skills that makes people "unqualified", it is a lack of current or recent employment, businesses defining the American worker out of the picture to allow the import of virtual slaves (read up on the severe restrictions of the H1B and similar programs):

WASHINGTON (AP) -- Federal officials say they're concerned about reports that some companies are trying to exclude the unemployed from applying for job openings.

The Equal Employment Opportunity Commission is examining how prevalent the practice might be and whether it could violate federal job discrimination laws.

There's no specific legal protection for unemployed workers. But commissioners are investigating whether excluding jobless applicants may be extra hard on blacks, Latinos or other ethnic minorities that tend to have higher unemployment rates.

The Labor Department says it's hard to measure the problem because most job openings are not posted publicly.

The concerns are based on anecdotal reports of advertisements or recruiting firms that discouraged the unemployed from applying.

By defining "qualified" as having a current or recent job, corporations can exclude huge masses of American workers as "unqualified", allowing them to satisfy the legal requirements to import foreign workers, who basically have no rights except those their employer dictates:

en.wikipedia.org...

www.h1base.com...

www.uscis.gov... 0VgnVCM100000082ca60aRCRD&vgnextchannel=73566811264a3210VgnVCM100000b92ca60aRCRD

Don't be fooled by the relatively low "cap"...emeptrions are easily obtained if there are no"qualified" American workers available.

American workers and not all stupid, uneducated lazy parasites, as some corporatists and business types constantly claim. I've known far more hard working employees than lazy ones. Contray to the opinion of some, being in business doesn't mean you have a right to extract the maximum profit possible, just a reasonable profit; no business has a right to exploit workers to the extent that the state must make up the difference between what the employer pays for a standard week and what is required for that worker to survive. Any negative difference represents a state subsidy for business.

If you can't afford to pay a living wage, you can't afford to hire workers, so do the job yourself or change your business model so you can afford to. If you can't accomplish that, then you don't need to be in business and have no right to demand the state make up the difference.

reply to post by apacheman

This is probably very true today. However, when the offshoring trend started, before our unemployment went so high, this was not really as much of a factor. But it certainly will be now, thus compounding the problem even further.

reply to post by ~Lucidity

More proof being unemployed disqualilies you from being hired:

In 2008, Michelle, a 53-year-old Illinois resident with 19 years experience in information technology, became another casualty of the Great Recession. More than a year later, after a long and fruitless job search, she finally heard from a headhunter who thought she sounded like a great fit for a post he was looking to fill.

But when Michelle told him how long she had been out of work, the headhunter turned apologetic: His client, he said, wouldn't accept people who had been unemployed for more than six months. Michelle would go on to stay jobless for so long that she ultimately exhausted all her unemployment benefits, and, for the first time in her life, was forced to apply for food stamps and welfare.

Michelle's tale was recounted at a recent Equal Employment Opportunity Commission (EEOC) meeting devoted to the issue of hiring discrimination against the unemployed. As the commission found, Michelle's experience is far from unique. No one officially tracks how many job openings explicitly bar the unemployed, but several news reports since last summer have uncovered numerous online job postings that require candidates be employed during the application process. One such listing was posted by the cellphone giant Sony Ericsson--a move the company later called a "mistake."

Job-placement professionals say that over the last year, more and more employers have made it clear they won't consider job candidates who aren't working. "A lot of our recruiters have had clients who have come across this," Matt Deutsch of TopEchelon.com, which brings recruiters together to collaborate in finding jobs for candidates, told The Lookout, calling the practice "unfortunate."....

.....

Some employers have said they're unwilling to hire unemployed workers because they believe that if a worker has once been let go, that's a sign that he or she is probably not a great hire. "People who are currently employed … are the kind of people you want as opposed to people who get cut," one recruiter told the Atlanta Journal Constitution in October.

And as Federal Reserve Chair Ben Bernanke has said, when people are out of work for a long time, their skills can erode, which may understandably make them less attractive to employers.

But Deutsch said that a bias against the jobless is also a time-saving device for companies that may themselves be making do with less, thanks to the downturn. "If you've got a huge stack of submissions, and you want to get through them quickly, [you can say] 'OK, all the people who are not currently employed, forget them,' " Deutsch explained. "That's gonna cut down on your workload."

reply to post by apacheman

Believe me, I don't need convincing of that, though some might. Gaps in employment, age, all of this was a set up and planned. I'll go you one better. Your credit rating and activity also effects your employability. So now not only can they force you into a hard place, but they can further punish you for being there if heaven forbid you've made any mistakes along the way.