It is important for companies to outsource their business functions to develop their skills and reduce their costs. It also helps them to increase the quality of their products and services and help them to increase their profits. Some developed countries have been outsourcing certain parts of their businesses, including their finance and marketing functions, to developing countries for many years. But how does outsourcing help poorer nations? But what does outsourcing do for the people at the other end of the process? What benefits do outsourcing countries bring to the table?
It is also good for developing nations because some businesses are moving to third world countries to outsource tasks.
Companies in developed nations have been outsourcing a lot of their business processes to third-world countries like India and the Philippines. This has led to what is known as outsourcing or, in a new way, being a nomad (or, as a generation calls it), or even being a self-employed (or, gigantically employed) person. Most outsourcers and remote workers today work from their homes or are able to carry their laptops almost everywhere they go.
Outsourcing business functions means that those that are not essential are moved to countries with lower labor costs. Outsourcing functions that need to be performed by skilled foreign labor are common in Asia, e.g., bookkeeping, accounting, marketing and human resources.
It is incredibly beneficial not just for companies looking to outsource, delegate or subcontract business activities but also for third-world countries like India and the Philippines, whose talent pools are being tapped to do outsourcing jobs. Outsourcing helps develop the labor force of these countries for specific industries.
In many ways, the outsourcing industry has been like a lifeline for the people of the country. BPO companies employ more than 500,000 people in the Philippines, and these companies bring in more than US$ 20 million (PhP 1 billion) in foreign exchange revenues every year. Metro Manila is now one of the top hubs for many outsourcing sub-industries, like the call center industry, and it accounts for up to 18% of the global market for call centers.
In India, the Bangalore region alone is home to nearly 100,000 IT workers, many of whom work for US companies. 1 million people in India work for major US companies, such as GE Capital and Microsoft. US technology companies have been offshored to India for many years. IBM has around 130,000 employees in India, which is almost half the workforce in India. It is also shifting many of its business functions to the country.
Taking care of social issues.
But achieving the ultimate business results is not as simple as what outsourcing companies are after. Outsourcing helps stabilize communities and transform the economies of third world countries. Many government officials and non-government organizations in developing countries are starting to recognize the positive impact of outsourcing businesses.
Convergys has an organization called the Community Action Network (CAN), which aims to build schools for poor children and to provide food and shelter for those who are hungry. Teleperformance is helping people learn new skills, while Sykes is supporting local health services and physical fitness. Likewise, the three local community organizations that are part of the telecom giant Telus are donating $100,000 each to local charities.
It is a big deal to have people working for companies that employ many people.
Outsourcing helps provide people with jobs that are well-paid and that are not as easily available to them otherwise. These are not ordinary jobs that are often created to support a few companies that do minor administrative functions. Outsourcing services providers are looking for employees who are willing to work cheaply to support their business activities. These are highly skilled individuals who know how to carry out critical business processes.
Outsourcing enables workers in developing countries to have jobs that are stable and that enable them to have a sense of pride and fulfilment that they are working for a company that can pay their salaries and that their families can live comfortably. They feel important because they will be able to get jobs that pay them approximately $400 to $500 a month, which is the starting salary for most call centers. You will receive good paying jobs and you will have the chance to move up the corporate ladder. It helps to develop workers who are self-confident, respectful, and believe that they can achieve their goals in life.