Offshoring jobs

Topics: Offshoring, Outsourcing, United States Pages: 1 (366 words) Published: November 2, 2014

IntroductionCompanies of the United States are becoming more and more comfortable with off shoring jobs to other countries, especially India. Offshoring is relocating all or most of the work labor of a business to a foreign country. The primary reason for businesses to locate jobs offshore is because operating and resource costs are lower. This results in increased profitability. Companies are able to do this because workers from other foreign countries are able to perform the task needed but at a cheaper cost. The business practice of off shoring jobs has become beneficial to companies as a long term effect, however, it has resulted in significant job loss to domestic workers. The environmental forces that are used by a firm to influence their decision to outsource and offshore jobs include economic, competition, labor and technology. Economic influences include the cost advantage of having operating units in foreign countries. Companies are known to outsource and offshore jobs because reduced costs for the firms directly result from the significantly lower wages and company benefits that must be paid to outsource and off shored employees. This causes competition between workers in the offshore country and domestic workers. For example, Americans are feeling the need to compete against highly skilled workers from India in order to keep their jobs. Labor is influenced because of the comparative advantage, which means that some countries develop a better ecosystem for certain types of industries. For example service jobs such as information technology, human resources, financing, and many more from the United States are being offshored to India because they have built a reputation for providing well education, skilled resources in that country, and they also communicate in English. Technological forces have influenced these decisions because the internet and all the related technology such as, email, conference calls, advanced graphic displays etc.,...
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