by pup55 » Mon 12 Oct 2009, 15:12:12
$this->bbcode_second_pass_quote('', 'B')ut here's the really sad thing. In the short run, at least, it appears to be WORKING. 90% of the folks they outsource jobs to are clueless and/or lazy, but they are CHEAP.
You know, it's interesting that you say this.....
I worked as a consultant for awhile for a company that specialized in "heavy industry outsourcing".... It turns out that at a lot of these giant companies, there are all sorts of needed skill levels, and this particular location, one of these big global companies in the automotive supply chain did a lot of work to train its "associates" to do the jobs that contributed directly to the nature of the product....They had to pay a premium to keep the bright ones... $25/hr or so with big-league benefits depending on what the job was....high compared to the local wage scale...
Well, they found out that some of these jobs just didn't require all of that training, and so in certain situations, this outsourcing company was contracted to provide the labor for the low-tech stuff. These guys were making $10/hr to start, with crappy benefits.... So the "real" employees went in one door, and the "outsourcing" employees came in another....and they all worked in the same giant factory.
For a typical operation, the outsourcing company hired about 20% more employees than it really needed to actually do the job, compared to the "world class" workforce... That made up for the ones that were lazy, not particularly sharp, or got arrested the night before. They also took a lot of time and energy to train some of these replacement workers the necessary job skills....The economics still worked....
I was tempted to feel a bit sorry for these people, because after all, they were working side by side with the "world class" workforce, and in fact, had taken over jobs that were previously done by the "world class" people, so the argument could be made that they were, in a sense "exploited", but for them, it was a complete blessing. These workers were typically late teens/early 20's, were a bit too old for the fast food environment, and if they had a good attitude, developed some "show up for work" skills, and if they paid attention to what was going on, they could eventually build a little bit of credibility and use it to get a "real job" elsewhere.... Also, if they chose to stick around for awhile, there were plenty of opportunities for advancement because this particular outsourcing place had many locations, and also provided the floor-level supervision (at about half the cost of a "world class" floor supervisor)....So it was a great way to get some job skills. I believe they even gave tuition refunds and that kind of thing to those that wanted to get some training. In that particular area, the local public school system was, shall we say, ineffective, and there were a lot of people with pretty reasonable intelligence that were just poorly educated.... a condition that can be fixed with a little focused training. Also, part of what the outsourcing people were good at is training these people to do more and more complicated jobs, until it got to the point where some of the more sophisticated operations were being outsourced as well.
So it worked for the company, the outsourcing people built a nice little niche, and developed the ability to tap into this little layer of a workforce, the workers themselves benefited by it, the only people that "lost" in a sense, were the middle aged white people that could have been making a world class salary emptying wastebaskets, and the argument can be made that this was nothing but an outmoded artifact of the union era that was doomed anyway.....
It also had the important benefit in the project that I was working on that if the company decided to curtail some operation, or shut down a piece of equipment, or even eliminate the whole manufacturing operation, all they had to do is shut the door, call the outplacement company and give them the bad news, and since they were all "temporary" anyway, there were no big severance packages or anything else. The good ones were usually just sent to another operation nearby, for some other "global scale" company where they would do similar work.... they might have to wait a few days until someone was fired, but most of the good ones eventually got something else, and the system continued to work for them.....
So in a sense it was a case where there was lower-wage competition for a given job in the factory, and a system was set up so that the company could tap into it and maximize their efficiency, and remain competitive with the operations in China and India who were, and I guess still are, paying $4 a day to twice as many people in a similar operation over there.
There are many pros to this but one of the big "cons" of course is loyalty. The loyalty of the worker to the global company is zero, and vice versa. The outsourcing people tried to foster a bit of loyalty to the outsourcing company, but even that was pretty minimal because of the turnover issues and that kind of thing....You came in, turned the wheel, and went home, and they paid you...That explained some quality issues that we had to deal with from time to time. It all pays the same.
The system would have never worked in 1960 because they would have been beaten up by the union people... can you imagine?
So I think that will be one of the trends that you will see going forward, that is, people will have "jobs" but they are quite likely to be temporary, lower-wage, and possibly as part of this or some similar outsourcing system where they literally go from company to company......as long as the wage competition versus similar imported items remains what it is. Ultimately some of the entry level supervision and, obviously some of the technical/engineering functions can be done this way as well, on a limited basis. Of course, if anything it accelerates this deterioration of middle-class income that we have seen, and has the unfortunate negative effect of reducing the number of consumers......
There will also be some "system level" jobs, but even these will feel some pressure at some level because of the lower wage scale in the region overall....
Like I said, there are pros and cons.....