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How Offshore Outsourcing Helps Drive Inclusive Growth

by: Sarah Joson

Wednesday, August 28, 2013 | Outsourcing News |

Offshore Outsourcing

An article posted at info.ISG-One.com recently discussed how offshoring correlates to Corporate Social Responsibility (CSR).

Offshoring is basically a process that is gaining traction and is consequently opening opportunities for both investors from developed countries and providers based in less fortunate regions.

Why is offshoring important?
For most economies, it is an avenue for businesses to benefit from labor arbitrage, more advanced communication infrastructures, among others. From the moral standpoint, everyone basically has the right to work, earn and receive decent wages, and the right to join a union (based on the Article 23 of the Universal Declaration of Human Rights). Offshoring is an ethical way for everyone to benefit equally. It is up to the practitioners to create a balance between using offshoring economically and ethically.

How does offshoring affect the availability of jobs?
Some countries need certain skills but lack the manpower, in other cases, some skills are more available in other countries but the demand is so low that people are forced to look for jobs elsewhere. Offshoring or global service delivery does not take jobs away from people and their respective countries. Jobs and work aren’t always certain but global organizations that are planning to outsource offshore should create comparative advantage locally and internationally.

How should wages be controlled in offshoring?
There are several factors that affect the wages given to those who carry out services for businesses that outsource offshore. These are skills and experience, cost of living, personal and trade union-negotiating power, and supply and demand. Things that are not considered are race and gender. However, for location, it is not necessary to equate salaries in country A to country B, what they have to look at is the industry rate in whichever country the provider is based in.
How do unions fare in offshore operations?
Although unionism is not practiced in many countries, it should be considered even in offshore operations. It has helped companies in the West to establish worker protection, strengthen negotiating power, and reinforce the right of employees to work on just and safe terms.

How can global businesses take part in towards a fair and inclusive growth?
Large organizations that have ample resources should give back to the community and should provide equal opportunities for all, even with the offshore service provider that they are contracting with. These companies should see to it that they are dealing with a provider that highly regards the safety and welfare of its employees, practices ethical sourcing, and are sincere with their CSR efforts.

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