Outsourcing of Customer Services & American Labor Force?
Outsourcing cannot be considered a new phenomenon even though the rising attention toward this subject has brought lots of important issues into the daylight. Lots of service and even manufacturing companies started creating jobs overseas to gain wider access to foreign markets. They act as consultants auditors and perform other functions where their customers are. Putting it in other words, they have found customers and came to serve them. Another reason for a big number of emerging foreign companies oversees is saturation of the domestic markets. Approximately 60% of the profits of American information technology companies are estimated to come from overseas. This practice is not unique in number of industries ranging from banking to consumer products to. The leading firms in foreign markets state that their overseas revenues exceed their domestic sales.
In most cases a great many companies focus their efforts on their core competence, in other words things they do better then their rivals. They delegate most of their activities to domestic suppliers. Looking at this issue from that perspective, overseas sourcing is not a major part of the trend to decentralize business operations. Outsourcing often helps a company operate in an increasingly competitive international marketplace. The key factor for the firm’s position in the modern global economy is the ability to maintain costs low. Another positive feature of outsourcing is enabling a business to provide 24/7 exposure to the customers, especially for those who need around-the-clock support. This is one of the core issues in today’s business world, whoever gets customer happy wins.
The secret to the customer’s love and devotion lies in good and most important always available customer service. Regardless of whichever industry a business is a part of, customer care is of primary importance. With growing competition worldwide, new technological innovations and constantly improving services and products, consumers are being attacked with too many attractive offerings and to win them over it is vital for the company to ensure that customer loyalty programs are being implemented. It’s important to understand that acquiring new customers is essential but holding on to existing ones is crucial. It is obvious that if existing clients are satisfied they will spread the word about your company’s outstanding customer service.
Some of the main problems customers have are of unresolved complaints, pricing issues, competing companies offering better deals, or simply they just feel that they are not being taken seriously enough. Thus companies have to be constantly tuned in to a customer’s needs. Determining what they want is an important factor in organizational success. Since the market is in constant movement a consistent and dedicated approach is needed in order to determine and understand the changing moods of a consumer. The problem occurs when customer care is not one of company’s core activities, as often firms lack the expertise, resources, and finances to ensure good customer services. Then outsourcing to skilled and dedicated customer care professionals would be a great option; one that many global companies have adopted.
Although outsourcing sounds appealing and in most cases it is that way, there are number of problems that American businessmen have to take into consideration. They probably will bump into a variety of difficulties dealing with unfathomable legal systems, in protecting their intellectual property, and meeting the requirements of different tax and regulatory agencies. Corruption in public sector also might be a problem.
Many people have been speculating on the concern of overall disadvantageous impact of outsourcing on the national economy. Looking at this problem in-depth provides however a different picture. The visible part this concern is extensively discussed by the masses and it states that U.S. employees lose their jobs or get transferred to less desirable locations. In past years because outsourcing has gained such popularity that this issue may have been lost its real origin. Any serious analysis of this matter must be taken to another level, where all pros and cons would be evaluated. In reality much more of U.S. employees keep their jobs because outsourcing helps the company stay competitive on today’s demanding market. Taking for instance call centers which can be defined as a place of doing business by phone with combined and centralized database and automatic call distribution system. Recently call centers have grew to become sophisticated business entities which provide incorporated services that are vital for the success of the corporations they were created to serve. Major call centers’ goal is to become the encouragement for business transformation while freeing up businesses from a number of routine tasks in order to focus on their core activities. When establishing a huge call center which could be a reservation center for airlines or hotels, or a big telemarketing center it is often believed that people who used to work in those areas in the States are simply laid off. In reality though many of them get new and even better positions because the firm enhances its financial strength, and focuses on the competitive advantages. For example, as companies upgrade their software systems, there may be less local demand for basic programmers, but higher for better paid systems integrators. In most cases companies simply change their mix of corporate needed skills. Currently they emphasize more managerial experience, enhanced knowledge of business processes, and understanding the domestic customer an essential point which cannot be outsourced from oversees, but has to be researched on the spot.
Cost reductions from outsourcing also opens up new market opportunities for U.S. companies and helps create additional work places here at home. Stating the benefits of service outsourcing in a common way yields more resources for the business which allow it to improve its performance. With implementation of outsourcing and the reserves it produces is the beginning of the modification processes in the company. Outsourcing permits firms to buy new equipment and expand training programs for the personnel thus investing in further development and growth of the business. Also American higher labor costs can be offset by higher worker productivity.
Outsourcing does not only bring immediate results for any one given company in form of lower costs and higher productivity, it has overall positive influence on the national industry. For example service outsourcing brings positive feedback in a number of ways. As developing countries such as China and India build up their economies, new markets are created for U.S.-made products and services. China in two recent decades has become a major importer of industrial and consumer goods and soon India is likely to do the same. Another reaction of the economy is the rise in salaries firms are paying to those countries providing outsourced services. For instance compensation of IT personnel in India is reported to be growing at 15-30% a year thus quickly reducing the financial gap between Asia and America.
Over the past few years far more new U.S. jobs were created than outsourced. Labor market in the States is one of the most open and that is the major cause of the nation’s economic strength. Approximately 1,000,000 workers quit each week and just about equal number is hired in their place. In contrast with European and Asian labor market, American employers are much more willing to hire new working force, because they cannot afford their business to stand still. Also many foreign companies are hiring American professionals to work at their offices, when setting up new businesses abroad or for other functions. It becomes clear that outsourcing especially in customer service sector can hardly be a cause of stagnating American labor market. In case of professionally set up activities and presence of trained workers in oversees locations, Americans only win freedom for undertaking new strategies for further development.
It also has been researched that the foremost causation of huge layoffs as well as new hires, is the technological breakthrough. Due to innovations and its implementation on the market many jobs have been eliminated while many new created. Again we have returned to the point that constant movement of the labor market is the best coordinator of resources; when someone is fired, another is hired. It’s a never ending process which brings about positive results just as outsourcing does.
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