Sunday, February 28, 2010

Outsourced/"Off-Shored" Jobs Coming Back to the US----What a Concept!!

By way of Carpe Diem,,,,From Detroit News: Mich. firm turns tables on outsourcing:  Burroughs moves call center back to Plymouth from India

Companies that "outsource jobs"(the more accurate term is "Off-Shore", but most recognized the former term) have to be mindful of the wage-to-productivity relationship. Workers in low-wage, developing countries, may be less productive than higher wage employees in developed countries.  Depending on the industry, the explicit savings from paying low wages may be offset by the decreased output from these workers, which may or may not be explicit in the short run.  In the example of call centers, the output fall is due to customer dissatifaction from dealing with customer service agents who may not be fluent in english or be able to adequately answer questions.  Over time, businesses find that they lose customers, or at the minimun, customer satisfaction diminishes...

"...In fact, a part of Burroughs' call center used to be in Bangalore, India, until company officials began to examine the real cost benefit of outsourcing. Burroughs is not the only company starting to question whether the initial cost savings adds up, long term. A small number of businesses and several state government offices are looking to bring jobs back to the United States and to Michigan in particular...While Indian workers were paid less than Burroughs' American workers, other costs were rising when customer calls were routed offshore. The number of machines returned to Burroughs was growing, as was the number of times the company had to send an engineer into the field to fix a problem. CEO Alan Howard began to question whether the up-front cost savings of outsourcing held up over the long haul. So Burroughs, which recently split from Unisys Corp., returned its call center to Plymouth, staffing it with the workers who had actually built the machines...."Our cost savings is greater than 10 times the cost saving we would have achieved offshore," Howard said. Customer satisfaction spiked, according to the company's internal tracking, and fewer units are being returned for repairs. And engineers are less often sent to the field to fix problems. "Customers prefer to talk to people who know what they are talking about," Howard said.''
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