Wages

Filed in archive Outsourcing Issues on March 14, 2004

One of the most important issues that most companies take into consideration is the wage rate in the outsourcing destination. Wages in India and China, for instance, are 70% less than in the United States. Some other countries, would only save approximately 40%.

Thus, are China and India better places to outsource your job? The answer can be "yes" or "no."

This is due to the fact that there are other costs involved in outsourcing. These costs are due to:

- Possible discrepancies in efficiency
- High price of knowledge transfer
- High price of soft skills training (such as customer service style and accent reduction for call center outsourcing)
- Communication infrastructure
- Product delivery infrastructure

In the end, wage rate is only a fraction of the overall costs spent.