Understanding The Effects Of Globalization And Outsourcing
posted in Career, Working Smart, Using Law Of Attraction At Work, Are You Asset Or Liability, Boss Mentality, Globalization, Outsourcing |Hey Folks,
Today lets look at how Globalization and Outsourcing can influence a companies human resource policies.
What Is Globalization
Globalization is a huge topic. But for our purpose, we will just talk about the Social aspect of it.
In our highly globalized economy today, our bosses actually have a choice of whether he wants to hire a local or foreign talent for each job position he has in his company. The deciding factor usually comes down to who offers a better value and if there are any laws/policies limiting his choices. As such, the following example is a common situation found in most developed countries:
Case Study: An IT specialist from Singapore draws a salary of S$3000. His boss could decide that hiring an IT specialist from India or China of equivalent skill set for S$2000 looks more attractive. So now, the IT specialist from Singapore has to justify to his boss why he is of better value then his foreign counterpart!
This phenomenal is happening across the full spectrum of jobs from road sweeper to office clerk to executives, managers, professionals and even CEO’s. And it is by no fault of theirs that they are in such situation. The world just gotten smaller, well, at least more inter-connected.
What Is Outsourcing
Outsourcing is utilizing experts from outside the entity to perform specific tasks that the entity once perform itself.
In the past, companies used to outsourcing only non-core operation where the cost of installing, manning and running the operation does not justify the undertaking. Help desk, IT support, Data Centre Operations, housekeeping are some famous operations that companies regularly outsourced.
In recent year, companies have started to outsource their finance, logistics and even staffs (via staff augmentation, also known as contract staffs). Any department that does not add value to the company and could be supplied by an entity specializing in the management of that operation/function could be outsourced.
What Is The Impact
The child that was born from Globalization and Outsourcing is called “New Economy“.
“The general idea is that a business should focus on those areas of its operation which are critical to its success and where it has a competitive advantage. Other areas of its operation should be outsourced, typically using technology as the facilitator.
In a developed economy, the critical success factors to a leading business are likely to be intellectual things such as brands, products specifications and technical capabilities. Many routine business functions (such as manufacturing and customer service desks) may be outsourced.” - Wikipedia On New Economy
What these means is that in today’s economy, anyone can be replaced if you do not have a skill or value unique to yourself that is beneficial to your company. Sounds scary but it is the truth.
What you need to understand here is that these are forces beyond your bosses ability to control, they can either flow with it or drown in it. Given those 2 options (flow or drown), what would you do?
Let’s Play Boss
“A small-medium enterprise (SME) has a finance department of 3 local accounts clerks and an Accountant. The boss knows that the clerks are demanding increments every year and their salary is already beyond market rate at $2500.
He finds out that foreign accounts clerk working locally are only asking for $1700 each with equivalent skill set and experience. If you were the boss, what would you do?
Then comes along a outsourcing company that offers him a book-keeping package that replaces the 3 clerks, closes his accounts faster, includes additional reports, no worries of staff turn-overs and guaranteed safe backup of all data at the equivalent of $1000 per accounts clerk. If you were the boss, what would you do?”
Summary
I know todays topic is on the serious side and a bitter pill to swallow but it is fact and it is the truth. The earlier you realized it, the less you will complain. The less you complain, the more likely you will find a solution to better your value in the company and in your bosses eyes.
Lastly, I would love to hear what you would do and what you opinion is on the “Let’s Play Boss” scenario. The floor is yours. 
Love,
James
PS1: I left out a lot of details linking Globalization and Outsourcing to New economy. To include all the detail, I would need at least a couple of 2000 word post just on Globalization alone.
PS2: I am dying to jump right to the last post where I can share how you can be an asset to your company but without the first few post painting the real world situation, I am quite certain many reader won’t take those suggestions seriously. So bare with me, 2 more post and the golden nuggets will be out.
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