Offshore Outsourcing

Offshore outsourcing is the process whereby a company contracts a supplier that operates overseas to perform certain tasks or services that are part of the goods or services that the company provides. Offshore outsourcing has become a rising phenomenon in the United States for about the past 20 years, with jobs being transferred to Southeast Asia, South Africa and parts of Europe. Two hundred and thirty thousand jobs are outsourced each year, and one in nine high paying jobs at risk of being outsourced. Many jobs that are outsourced are in the fields of information technology, accounting and medical and legal services (Hira & Hira, 2005).

Companies outsource for several reasons. They maintain that outsourcing is necessary if they wish to remain competitive in today’s global economy. However, the main reason for outsourcing is the availability of highly skilled, well-educated labours at a much cheaper cost. On average, China graduates three times as many engineers as the United States, which leads to the creation of a talented, innovative and inventive labour pool. The cost of living is much lower in developing countries than it is in the US, so that companies can pay foreign labourers wages that are lower, but still enough for those persons to have the standard of living in their country that an American also has. In fact, a Chinese engineer can be hired for US$15 000 a year, one fifth of the cost of hiring an engineer from the Silicon Valley (Hira & Hira, 2005). Companies reduce their overall costs by 45%, and save up to 70% on their initial costs by outsourcing. Therefore, they can hire a larger workforce at a cheaper cost in foreign countries, which increases productivity and in turn, increases their chances of beating ...

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...oneer status once held in the field of technology, provide workers with the ammunition they need to remain part of the workforce and punish companies for abusing policies.

Works Cited

Hira, R., & Hira, A. (2005). Outsourcing America: what's behind our national crisis and how we can reclaim American jobs. New York: American Management Association.

Moore, M. (Producer), Moore, M. (Writer), & Moore, M. (Director). (1989). Roger and Me [Motion Picture]. United States of America: Warner Bros.

Office of Senator Joseph I. Liebermann. (2004). Offshore Outsourcing and America's Comepetitive Edge: Losing out in the High Technology R&D and Services Sectors. Washington, D.C.: United States Senate.

Wikipedia. (2012, January 28). Flint, Michigan. Retrieved from Wikipedia, The Free Encylcopedia: http://en.wikipedia.org/w/index.php?title=Flint,_Michigan&oldid=473640153