Jobs Moving Overseas

1
Jobs Moving Overseas
Presentation by Tejas Shah
2
(No Transcript)
3
Main reason for outsourcing
Lower Wage costs
Government policy Dont have to deal with
EEOC, OSHA, EPA AND IRS
4
Things company should take in consideration
before outsourcing

• The Cost of Selecting a Vendor
• Up to 200,000 per year
• Documenting requirements
• Sending out RFPs (Requests For Proposals)
• Evaluating the responses
• Negotiating a contract
• Legal fees
• Hire an outsourcing adviser (option)
• Travel expenses
• Process can take from six months to a year

• The Cost of Transition
• Perhaps one of the most expensive stages of an
  offshore endeavor
• Three months to a full year
• Bringing people to America to learn
• Pay them while they are in America with U.S
  hourly rate
• Temporary visas
• Travel expenses
• Work with in-house employee ( Double cost)
• No production during the training period

5

• The Cost of Layoffs
• Some unanticipated costs
• Severance and retention bonuses (keeping
  employees there long enough to share their
  knowledge with replacement)
• Major morale problems among in-house survivors
• The Cultural Cost
• Productivity (One American worker to two or
  three less efficient workers overseas)
• American workers comfort level with speaking up
  and offering suggestion
• Decline in application development efficiency
  for first two years (up to 20)
• Decline in productivity can add as much as 20
  in additional cost
• Communication issues can slow things down
• Travel expenses (for face-to-face interaction)
• The Cost of Ramping Up
• Well defined and accepted internal software
  development and maintenance process
• No more in-house experience

6

• The Cost of Managing an Offshore Contract
• Managing the actual offshore relationship is also
  a major additional cost
• Invoicing
• Auditing
• Ensuring cost centers are charged correctly
• Making sure time is properly recorded

What can be done about this problem? Nothing Wha
t if we stop American companies outsourcing
They will lose in world competition Companies
will go out of business Entire workforce will be
gone rather than few jobs
7
So lets think positive Increased competition
Entrepreneurship or education Cheaper online
services or cheaper imported goods (like 1980s
World Economy) If other country becomes develops
like U.S. more new opportunity (Jobs)
Hot jobs for the short run
8

• Five safer sectors
• Health care
• Other in-person services service jobs, food
  preparation, restaurant work, nursing, retail
  sales and
• office and clerical work.
• Real estate
• Financial Services
• Security