Hilary hits out at outsourcing

1st August 2007

Hilary hits out at outsourcing

The run up to the American election is possibly the most ‘populist’ driven election in the world, where candidates try to pander to, or placate every minority in the hope that this will swing the majority vote their way (As well as earning sizeable chunks of money towards their electoral campaigns from the lobbyists who asked the candidates to speak out for their interest groups in the first place)

The old chestnuts now (yep its six years ago since 9/11) are of course American homeland security, various racial issues and immigration, however the issue of Outsourcing in America is guaranteed to get candidates a deal of exposure and support in the industrial heartlands of the US.

A recent speech from Senator Hillary Clinton last week to the Indian Institute of Technology contained the following comments

“I am concerned that trade is becoming a zero-sum game, instead of being a means to lift up all who participate”
“If globalization pushes down US wages, other countries will be affected.
“Workers in the U.S. are concerned about outsourcing, as I’m sure you know. And I think they have a right go be,”
Senator Clintons fellow running mates are also taking large swipes at Outsourcing, particularly Senator Obama who is reported to have been far more aggressive in his ‘stance’ against the loss of US jobs to third world countries in a recent speech.

Of course I appreciate the fact that these are seasoned politicians, who DO understand the bigger picture when it comes to Outsourcing, however I cant help feeling that its just ‘feeding’ the paranoia of certain groups, who should really be sent a completely different message. Outsourcing is a permanent fixture in the global industrial landscape, and that Americans CAN remain at the forefront of Global trade by recognizing this fact, harnessing and utilizing the opportunities that Outsourcing can present, being innovative and learning new skills sets, rather than continually bitching over the fact that China or India can put wheel nuts onto a Chevy in Bagalore or Shenzhen for a 7th of the cost of an overpaid, overweight, over benefited, production line worker in Flint Michigan.

This entry was posted on Wednesday, August 1st, 2007 at 1:44 pm and is filed under Outsourcing, BPO Business Process Outsourcing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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August 2007

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1 On August 2nd, 2007, Marco said:

Well, I have to say I had to make a comment to this because it is all rather interesting to see who is saying what but more significantly “why” they are saying it.

What is the truth? Where is the research? What is the gain from Hilary Clinton’s comments that America is suffering from the surge of outsourcing from the East?.

Obviously we would think to garner support from a certain group in America to support her election campaign and get enough critical mass to make this a winning issue for her.

If you say something often enough and achieve more support people will believe it and a new paradigm is set into a group’s mind.

Now it is interesting to note that according research, manufacturing is at its lowest level of unemployment in the US in the last 10 years, therefore the creation of new jobs in the manufacturing sector continues to outpace the loss of jobs to outsourcing!

Wouldn’t this comment be more positive in nature? Well that depends if it gives her weight and more influence in the elections. Her comments will certainly incite FEAR in a large group and fuel hysteria that Asia is taking all their jobs….and FEAR gets people to take action as people would rather AVOID pain, meaning they will do more to avoid pain than to create pleasure…

So Hilary is working on FEAR as a trigger to get people to take action to vote for her….this is of course my opinion but if you dissect what she is saying, you will see the same.

This is dangerous, as it makes people second guess the outsourcing industry and makes people question if it is the right thing, when really after the dust settles everybody makes a lot more money, quality improves and companies expand! thus creating more jobs.

If companies pay over high salaries and benefits they cannot move as quickly into profit and have more risk in terms of losing money, this in turn loses jobs, creats more welfare and costs the government a LOT more money, you do the sums!

2 On August 3rd, 2007, C. Prasad said:

Great comment, very insightful and i believe you to be very correct in the ‘pshycology’ of generating action through fear. Some countries use religion for this purpose, but US politics have been using fear since 9/11 to enable them to manipulate the US population into becoming comfortable with extreme policies and political decisions, so its no wonder that if this tactic has been working so well over the past few years, that the presidential candidates are tapping into it too.

3 On August 4th, 2007, Pro-outsourcing said:

I think that Americans who complain about outsourcing of jobs are the biggest hypocrites in the world. The U.S. prides itself on being a competitive marketplace that is second to none in the world. The reason the U.S. has become such a powerful economic force is through cut-throat competitive tactics and emphasizing adaptation to constantly changing economic environments. The reason other countries are not in the position of the U.S. is because we emphasize these values in our own country and attempt to spread them around the world. NOW!!! When 3rd world countries are able to compete for jobs, lazy Americans cry foul, because they are not able to adapt to new economic environments. This anti-outsourcing movement is completely UnAmerican. If we had this attitude as a country during WW 2, Hitler would have succeeded in making the world a very different place. I say instead of crying about a few lost jobs, gain more knowledge, learn more skills in an area where jobs are plentiful. The simple fact is that Americans are like spoiled babies who don’t want to give up there bottle and this is the perception of the American worker. The reality is that the perception of the individual worker who loses his/her job does not match up with the reality of a global economy. In fact, out-sourcing has proved to be a good thing for the American economy as a whole. Just because you lost your job to outsourcing does not mean the whole economy is going down. In fact, outsourcing allows American companies to be more competitive and pass that cost savings to it’s customers. With more money to go around more jobs are created in other segments of society. Instead of whining and forcing state legislatures to pass unconstitutional laws against outsourcing, I think the American people need to look to the big picture. Anti-outsourcing legislation is like blocking a big volcano. Sooner or later it is going to break under the pressure of the emerging world economy. Americans need to shut their mouth and start adapting, or they will be left behind in a globally competitive economy.

4 On August 4th, 2007, Nicholas said:

“Outsourcing” is ridiculous. If you can’t afford to run a business with fair wages you shouldn’t be allowed to run that business.

5 On August 4th, 2007, Brian Calla said:

I have read all these comments and articles on this blog. The reason American jobs are getting outsourced is because its so cheap. It has nothing to do brain-power its all about cost saving to the stock holders and CEO politics. Example J&J is sending 140 jobs to india trust me your Johnson & Johnson baby shampoo wont go down in price. They send jobs to place like China or India because they can. It’s dirt cheap!!! I am all for open market but american workers can’t work for peanuts to keep up with third world wages.

So what it comes down to is a person in the company shows them numbers and how many millions they save. The stock holders love it. All the while giving the greedy bastards “more money” who have no social or moral responsiblity to the people working in this country. Meanwhile Americans who have worked hard and gone to school get screwed and have a hardtime supporting their families. Not only that to get train your replacement before they cut you how nice!!! If a country like india wants to have jobs they need to create a ecnomony of there own.

6 On August 4th, 2007, Brian Calla said:

One other thing.. The solution to this is get higher skills. Sorry they already take those jobs too. They have high skiller works and tell them to train your replacement. Some don’t even come in with basic knowledge and only ran stuff in a test lab and took some tests. That has nothing to do with experience. I am fed up with this. I feel you have one choice just as the auto workers did. Find a new field because IT is dead. Its either docotor lawyer, plumber, roofer or fries at macdonalds. Service jobs!!! Service jobs!!!There is no global econonmy the united states is the econonmy that drives the world not the other way around. We buy everything!! We should have so many jobs and so many different kind of jobs in service and manufacturing. But instead we a slaves to walmarts, Lowes, burger kings and service jobs. Kids in schools need options broad this is america of freedom and choices. Sending high paying skilled jobs to India is crazy and doesn’t give bright futures to anyone living in the US.

7 On August 4th, 2007, unhappy said:

Outsourcing is offensive to Americans who buy what they assume are American products from American companies–until they have a problem with the product or billing, etc. and end up talking to someone in India who barely speaks English. I lived in Austin when Dell began to lay off thousands of employees as it outsourced more and more if its product manufacturing and customer service. Do you want to know why unemployment in this country is over 4%–call customer service for Dell or RealPlayer and ask someone in India who has a job that used to belong to American and is now being paid a quarter of the salary that the ompany would pay an American? With every occurrence of outsourcing I find–I have found another company I will refuse to do business with in the future. Outsourcing needs to be against the law!

8 On August 4th, 2007, Glen Stidolph said:

I have to admit to the hairs on the back of my neck stand on end when I read comments similar the last couple on this post regarding the ‘evil’ of overseas outsourcing, and brings to mind a popular saying “Don’t believe all that you think”.

The idea that companies jump onto the outsourcing bandwagon due to the hype surrounding the huge savings they will enjoy is a little misinformed. It is my experience that the vast majority of companies who are outsourcing, or considering outsourcing, fully appreciate the reasons why they are compelled to do so.

There are 3 levels of outsourcing, Tactical, Strategic and Transformational, and a companies understanding of which level they require more often than not determines the service or product they outsource, as well as the outsource destination. I’m sure that anyone interested in outsourcing will have seen the emergence and frequent use of the term ‘best source’. Best sourcing is a best practise outsourcing strategy of matching your companies requirements to the best location and best vendor, be it offshore or near shore.

Companies based in higher cost countries undoubtedly benefit from a ‘blend’ of offshore and near shore outsourcing, and the doom mongers who have constantly tried to allude that outsourcing is killing US industry, worker by outsourced worker, a collective death by a thousand job cuts have patently not bothered to read the empirical evidence to the opposite.

For example, lets look at the field that I am most involved, and has attracted the most critical attention, Manufacturing. US manufacturing is up 700% since 1940, a rate of 3.7% growth per year which exceeds the rest of the non-farm economy. Productivity is way up as well, American Manufacturing today now uses fewer than 200 workers to produce what it would have taken 1000 to produce in the years following WW2. The overall manufacturing sector is actually larger, not smaller, as the doom mongers incite, consistently outpacing the growth of the overall GDP over the past 50 years, and what is even more impressive of this consistent growth is that it has been continuous, despite the intense competition from Asia, Latin America and Europe over the last 5- 10 years. Not bad for a sector that certain people would like you to think that it’s on its last legs.

Outsourcing, as some of the comments have pointed out, is not without its pains and unfortunately for some in the manufacturing sector have lost their jobs as the requirement for factory brawn is replaced by the demand for factory brains (knowledge workers) I could quote many examples of companies that have had to increase their workforce in order to cope with the increased demand for their products or services due to their more lean operation.

9 On August 7th, 2007, Marco Robinson said:

Wow, it’s great to see much interest in this article and the varying responses it has generated.

It is interesting to note that everyone has a right to express their opinion how they see fit.

Anyone that expresses that opinion is protecting what they value most. What would that be? Freedom, money or a community they just don’t want to lose.

The truth is the american stock exchange has never been as high as it is this year, it has set new records and the rest of the world has benefitted from that. Booming economies create more business or more money to generate more business. More business creates more jobs locally and internationally. More profit allows businesses to deliver better products that people will buy. Better products create more sales as people refer their feelings to everyone they know. This creates more demand. More demand creates bigger operations and more diversity, as products spin off other products.

If we truly put ourselves in a position of abundance, there has never been a time ever in the world where there have been so many opportunities and so many possibilities. The information age has totally revolutionised the way we communicate, and this in turn is making us reach where we have never before.

How does everyone benefit? Everyone has more opportunity to create what they want from their life, because simply there are more ways to do it and there are more ways to find out how to do it.

“Best sourcing” doesn’t just work one way. Best sourcing includes outsourcing to the US from Asia aswell!

You can NEVER replace an american or an american culture in every single angle of business. I will give you one example. It has been proven consistently that Amercicans have been the most successful marketers the world has ever seen. Noone can deny that and everyone respects that.

Amercans have created some of the best ways to communicate in sales and marketing. A lot of outsourcing countries cannot match that cultural skill whatever they do, without a significant american and western influence on their teams.

Having successfully managed many call centre campaigns to the US, UK and Australia, I would never have succeeded if I did not place people with the same accent and leadership skills I would have if I was based in the US. I had to acquire talent to do that. I had to pay them more than they were paid in the US to attract them to Malaysia. I didn’t regret that as they gave my campaigns an added dimension I could never have replicated with local staff.

This in turn has created an expatriate community in Asian countries of huge numbers and it is on the increase.

There is more demand for skilled workers and the people that are prepared to learn more skills are the people that will benefit the most. The unlearned will perish in obsolete mindsets that creates unnecessary outsourcing as if they don’t want to learn they’ll be somebody else that will. I would say that would be bad sourcing at first but best sourcing for the right reasons.

Our duty as business people is to educate the workforce that change is inevitable and the attitude towards that change is everything.

The consequences of that change impact ultimately delivers more profit and more opportunity….