Outsourcing: Good or Bad?

Filed in archive Outsourcing Issues on November 15, 2006

This could be considered as the eternal dilemma when faced with the outsourcing topic. Some people consider outsourcing as the reason why many workers, particularly in the US are losing their jobs. Aside from that, most people also assume that outsourcing means running "sweat shops" to these outsourcing destinations.

The research study done by IDC aims to examine this dilemma. Here is an interesting statement which answers the "sweat shop" issue in outsourcing:

If you could compare the large salary difference between a call center agent in India against a call center agent in Australia, you could see that there is indeed a large difference in terms of cost. However, the salaries paid to offshore workers in low-cost countries are often many times higher than what a worker in these countries would earn in other traditional sectors. Many gain the opportunity to own more consumer goods, live a middle-class life and break out of the poverty cycle.

The research showed that the salary difference when outsourcing is a case to case basis, pointing out that workers from first-world countries could consider the outsourcing workers' salaries as small but for these outsourcing workers, it is much more than what they earn in their country.