During the 1960s and 70s, development of transportation and communication channels made the job market open to foreign countries. Today the whole world is one global village and it is quite common to see people working for a company based in another country with no physical premises in their own. The information communication technology and telecommunication sectors were affected by this in large scale. It is mainly due to the availability of cheap but skilled labour in developing countries. Today, many worry about “jobs being stolen” by these cheap labour forces; however is it truly the situation?
Offshoring or outsourcing is where a certain major company sublets its projects to developers in another country. In telecommunication and finance-related companies this was done mainly to establish “call centres”. In information communication technology or ICT sector, many software development firms started moving to especially Asian countries such as India, Pakistan, Vietnam and Sri Lanka due to the availability of ready, skilled labour. It was also cheaper than what they had to pay for any native workers. Some of these were contract out as whole projects. Some were held on to while a portion of it only was given out such as quality assurance software or UI/UX designing.
Research findings- is the threat real?
The OECD, “Organisation for Economic Co-operation and Development” which is an economic-based organisation consisting of 36 member countries founded in the year 1961 has carried out a comprehensive study on this. It showed that 19% of Australians who have jobs are employed in such occupations that have the tendency to be affected by offshoring. However they also found that there are no clear evidence to conclude that offshoring has led to a decline in employment for native Australians in ICT service sector. Jobs such as keyboard operators, desktop publishers and switchboard operators have diminished purely due to technological changes and not because of offshoring.
Advantages of offshoring
Apart from the “cheap” labour, offshoring carries several distinctive advantages. One is that some developed states such as Scandinavian countries who operate on ICT based systems for pretty much everything, have not enough people to choose suitable developers from. Even if they have, those resources are pretty expensive. Increasing of productivity is another advantage. Outside of a certain country, you can easily find a workforce who will be available for 24 hour roster work for your own time zones. In addition, improved education and capacity of English communication of offshore workers is a plus point in promoting your product, be it an app or supplier management software to a potential customer. Enhanced technology also makes outsourcing quite easy with various communication platforms and knowledge sharing apparatus. It is clear that ICT services offshoring is here to stay. This opportunity opens up a bigger pool of skilled employees for companies to choose from. It also permits businesses to save more money and increase profitability.