They took our jobs! Cry the detractors. Thousands of UK jobs are simply disappearing as big “Indian” (insert outsourcing location as applicable) outsourcers continue do our work at lower cost. They even start work five and a half hours before us – how can we possibly compete?
It seems the battle lines are being drawn again as we stare into another encroaching protectionist maelstrom. Just this week we have seen silicon.com release its annual offshoring survey, finding that ‘47.5 per cent of respondents said their organisation has “probably” offshored IT jobs’ and 32 per cent believe, or are convinced, that offshoring “could” see them lose their jobs.
Meanwhile the Equitable Life
and Thames Water are receiving a pummelling in the media for outsourcing deals to HCL and an unnamed Indian provider respectively. To top the week off, the Association of Professional Staffing Companies
(APSCO), a recruitment association, has hit out at Indian providers, for using UK intra-company transfer rules to bring thousands of Indian IT staff to the country which they say ‘damaging” the job prospects of British workers’. So now India is not only taking our jobs offshore but onshore too?!
In response the UK Government has implemented a largely symbolic change to the Tier 2 (Intra company transfer) rules, meaning that Indian IT workers will need to demonstrate 12 months IT experience rather than the current six. My cynical side expects this is simply a move to placate dissent around this issue as most IT workers being brought to the UK will usually have much more than a year’s experience anyway.
But don’t worry, the NOA hasn’t been offered a Daily Mail column or anything like that. We just believe it is important to meet these criticisms head-on, and the best way to do so is inject a little common sense into the argument with the following points:
• The fact is that all staff brought to the UK under a working visa will also need to be paid a UK wage. This means the argument isn’t about cost as APSCO states, but skills. Why would a UK company bring a worker in from India if an equivalently-skilled Brit is also available? In this case, the debate should be about whether the UK has an IT skills gap that these companies are trying to fill, and if so, what are we doing to fix it?
• Indian companies and those using Indian staff are cutting their overheads, streamlining processes and augmenting the customer’s capabilities to ‘do business’ and grow. This means businesses are growing in the UK, creating more high level positions and ultimately paying more tax into the UK purse.
• It is important to keep in mind that the numbers of Indian workers being brought to the UK compared to indigenous IT staff are still small. The government also does not oppose these kind of transfers: immigration minister Phil Woolas defended the practice in a recent FT article, saying: “Intra-company transfers are an important part of making the UK an attractive place in which to do business, and therefore keep industry and the economy moving.”
• It has also been detailed in various studies, most recently from Nottingham University
, that offshoring jobs does bring overall benefits to the UK economy. Their Globalisation and Economic Policy centre (GEP) found that the ‘efficiencies it [offshoring] has brought has actually boosted business and led British businesses to employ more people in the UK, not less.’
• To top this off, Indian outsourcing giant, FirstSource
, has created over 1,500 call centre jobs in the UK since 2006. Plus Indian investment in the UK, and consequently in the UK economy, is only likely to increase going forward creating further examples like this.
And that’s the most important part, the offshoring of certain jobs to lower cost or better-resourced locations, makes business sense in some companies and overall UK economic sense. Of course, it is painful on a case-by-case basis, but this is usually a symptom of outsourcing mismanagement by those engaging in such contracts.
Those looking at sending work offshore should first make a clear business case. They should then work to understand the impacts on their staff, whether they will need to make redundancies, and take responsibility for what happens to staff after outsourcing. Can they be re-deployed, aided in developing their skills going forward and so on? Communication throughout the process is vital so employees are respected and have as much time possible to take their own decisions.
By all accounts, outsourcing and offshoring is set for a big boost in 2010 and beyond as UK companies look to rebuild after the recession. This will be a good thing for UK business and will continue to create new employment and business opportunities. The opportunities may look different from before, but this is simply the evolution of industry. The UK must ride with this evolution rather than get bogged down in the protectionist offshore-bashing once more.