Analysis of Offshoring Jobs - Research Paper Example

Analysis of Offshoring Jobs Introduction Offshoring can be regarded as a form of outsourcing; it details business functions outsources that are being carried out in other countries. In most cases, offshoring occurs with the sole purpose of reducing expenses incurred in labor. There may also be strategic reasons for offshoring; these include the desire to tap talents that may not be available in the domestic job market, venture into new markets, and overcome regulations that hinder carrying out some activities in the domestic market. Over the last decade, the production of high tech goods in the United States has steadily moved to Asia. This results from a stable, global economy, lower wages, and the rapid growth of markets in Asia. American firms have favored countries such as Malaysia and China to become locations of manufacturing. This paper gives an analysis of the evolution of offshoring, types of jobs being offshored, advantages and disadvantages of offshoring. Evolution of Offshoring India has become one of the dominant players in the field of offshoring; this has taken place mostly in works related to software. There are several factors that have aided the evolution of offshoring in India and its spread to other countries. The first factor includes the regulations put by the Indian government during the 1970s; these regulations allowed all foreign ventures to have ownership of majority Indians. Another factor that contributed to offshoring included the advent of the internet as well as telecommunications technology. This enabled the doing of computer based work anywhere in the world. As a result, the phenomenon of offshoring spread to countries all over the world (Gupta, 2008). Offshoring witnessed immense changes during the early years of 1990s. The CEOs and CIOs of large corporations realized the need to reduce budgets of information technology. The significant and rapid development of web-based communication made information technology become an essential part of carrying out business, thus leading to the revolutionalization of the corporate world. To curb the costs of maintaining processes, Chief Information Officers and Chief Executive Officers changed their strategies and began outsourcing the development and maintenance of IT systems. This set the trend for other support and administrative functions being outsourced (Gupta, 2008). Types of jobs being Offshored According to Gupta (2008), there are several jobs that are offshored all over the world; these jobs tend to be more affected by outsourcing than any other jobs. One of the jobs being offshored includes technology jobs being offshored to countries such as India. These technology jobs comprise of software support and computer programming, which the United States has offshored. India has turned out to be one of the convenient places where businesses can offshore technology jobs; this is because workers can be able to speak English as a native language. Indian employees are also preferred because they can work during nights in the U.S. as a result of the difference in time-zone. Other jobs being offshored include office services; these encompass jobs in traditional services offered in offices that include product sales and setting up meetings. Another category of jobs being outsourced includes manufacturing jobs as a result of the remarkable benefits and high wages. Since 2001, the United States has lost 2.5 million manufacturing jobs, as estimated by the American Federation of Labor. Other jobs being offshored include data entry jobs, especially transcriptionists in the medical industry. The reasons for offshoring these jobs are because they require the entry of numbers and simple words into documents. As a result, the understanding of English language is not a requirement to perform these jobs. Advantages of Offshoring One of the advantages of offshoring is that it saves the costs of staffing in an organization. This phenomenon can be attributed to the lowering of labor costs, leading to high profits. Other costs saved through offshoring include labor costs since other countries tend to need few benefits; offshoring also leads to lower costs in terms of taxes. The other advantage of offshoring is that it saves on office equipment and space. With offshoring, it can be easier to increase staff without having to increase the space needed in the office. Offshoring also saves on the management and supervision of employees. Onsite motivation and supervision can be provided through professional managers who ensure that staffs perform their duties accordingly. Offshoring also increases the productivity and morale of the staff (Gupta, 2008). Disadvantages of Offshoring Apart from the benefits derived from offshoring, there may be several disadvantages of carrying out offshoring. One of the disadvantages includes limitations in financing and appraisal. It becomes difficult to determine the full value that the company has, which confuses investors, financial partners, and owners. The other disadvantage of offshoring includes political and environmental disruptions. In terms of environmental limitations, serious storms may hit the shipping lines of the offshored facility or the facility itself. Political limitations may have an impact on labor laws, which may be limit the operations of an organization (Gupta, 2008). Conclusion In conclusion, offshoring has become a common phenomenon in today’s world of business. Corporations have realized the benefits they can gain by carrying out offshoring. The origin of offshoring can be traced back to India, where organizations started offshoring technology jobs during the 1970s all through to the 90s. Some of the offshored jobs include technology jobs, manufacturing jobs and data entry jobs. Offshoring is advantageous since it reduces the costs of operations and saves on office space and equipment. However, it can be disadvantageous due to political and environmental limitations. References Gupta, A. (2008). Outsourcing and Offshoring of Professional Services: Business Optimization in a Global Economy. New York: Idea Group Inc (IGI). Read More