Outsourcing in Tech Industry Continues to Be Hot Topic

3.14.14 - OutsourcingFor businesses acquiring employees for one-time projects in fields such as translation, customer service, website design and software development, there’s little need to keep it local. A domestic firm can arrange for someone in another country to build a website or answer the phone. Chances are that these workers can be incorporated into the project at a lower rate.

Online marketplaces such as Guru, Freelancer, Elance and oDesk help to establish these collaborations. They publish workers’ portfolios and skills, publish and solicit reviews, and arrange for monetary payments while taking a small cut from each collaboration. In general, contractors with ratings attached to their profiles have experienced marked increases in employment rates and earnings.Contractors residing in low-income locations who have the necessary skills can see a significant wage increase through their participation in a digital marketplace.

About 25 percent of today’s companies have maintained some form of international sourcing for tech-related activities, according to a recent survey by BDO USA, a consulting and accounting organization. Companies that have been involved in international sourcing experienced fewer low-wage jobs.

Most American organizations remain entirely local, performing their work using internal processes. Domestic is most prominent in industries such as IT support, janitorial services, facilities maintenance and transportation services. Smaller organizations, which currently for 80 percent of all employees, are often domestically oriented. These organizations include retail stores, city and county governments and nursing homes.

When consumers see that certain products are made in Bangladesh or China, they may assume that low-cost locations are receiving the lion’s share of jobs. Admittedly, offshoring could lead to fewer low-wage jobs in the United States or an increasing need for skilled workers. More research studies may be necessary to understand the total impact of outsourcing in today’s business world.
For the United States, Canada and the European Union are the most significant trading partners, with China quickly gaining ground on the two leaders.

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