Mailbag: Readers speak out about offshore outsourcing

When I brought up the topic of offshore outsourcing in a recent newsletter, I knew it would be a contentious issue. I was definitely right.

I received many e-mail messages from readers about the issue, and not surprisingly, the majority of the messages were against the whole idea. For example, one reader took the viewpoint of someone who has lost their job to offshoring:

“The well educated, financially secure person always looks at situations others find themselves in as, o-well, they can be trained, move along, it’s normal to be without a job. We are not talking about just telephone answering positions, like catalog sales. But, highly technical positions, educated, skilled white collar jobs, along with the manufacturing jobs.

“Each job lost is another one that needs to be created, sometimes with lower pay. In addition, it may be further away from home, increasing the stress level on the individual and the family. Yes, it does hit a nerve to everyone living in America.  Furthermore, American workers who buy goods from these companies shipping jobs overseas feel hurt in more ways than just the position moving to a foreign country. We need to stop the hemorrhage, let these other countries build their own companies and hire their own people, but not at the expense of the American worker.”

Another reader had an innovative idea as to exactly which American jobs should be outsourced:

“I think you are right on the money since we did not learn our lesson 25 years ago in manufacturing when many jobs were lost, at all levels, due to outsourcing overseas. Besides the jobs being lost, technology itself was lost in bringing foreign companies up-to-speed. We became more dependent upon foreign manufacturing, which pre-empted more farm-out of technology because it was perceived as a way to save money.

“Executives make decisions to offshore based upon the bottom line to the organization. Maybe the high-paying executive jobs should be offshored leaving middle management and others onshore to protect the enterprise technology and enjoy the fruits of their labor. After all, there are fewer [high-paid] executives that would be affected by offshoring [of] their positions, as well as, saving those multimillion-dollar salaries.”

One surprise came when I received several messages from a guy in India who actually runs an offshore outsourcing company, advising *against* outsourcing to India!

“We at were very excited about opening our branch in India. However, to our bad luck we ran into one problem after another.

“India is an ideal place to outsource IT labor work like Web site development or custom solutions, what the majority of companies were doing until recently. But once you get into more sophisticated work, like research and development of products or hosting of confidential data, there are absolutely no copyright, patent and intellectual property protection laws enforced in this country.

“India is one of the top 7 most corrupt countries in the world. The laws are only in the books, justice is rarely ever served. Twenty percent of the politicians have serious criminal records (murders, grafts, etc.) and a civil case on average takes 10 to 20 years to resolve.

“The majority of businesses completely avoid court, police and try to settle disputes or even criminal offenses out-of-court. Lawyers are not there to practice law, but act more like agents to bribe politicians and/or police to get your work done.

“However, even though one can think one can get work done by simply bribing, it is not that easy. It takes lot of time and effort to decide who should be bribed and how bribed money will be distributed effectively. Every corrupt officer has to agree on the amount etc.”

He makes a good point – when you send work offshore, the number one area of risk is that your valuable intellectual property will fall into the wrong hands, and then local enforcement of patent, trademark and copyright laws is non-existent. This should be a key concern to anyone considering this type of outsourcing.

As always, I welcome your ideas, suggestions and comments on the subject of outsourcing; you can e-mail me at mehr@enterprisemanagement.com. Thanks for reading.