Consider Insourcing

Friday, March 16, 2007

Much has been made of outsourcing, whether by supporters noting the economic benefits or opponents arguing that it takes away jobs. For a while now, everyone seemed to agree on one thing; outsourced labor can cost considerably less and India is one of the most attractive countries to choose. However, last month's Economist issue, "India on Fire," points out some startling realizations that may be the start of a trend toward finding workers closer to home once more.

India was once sought after as the location for phone banks and other outsourcing due to the low labor costs. However, last year rates in India have tripled and unexpected costs have proven to be significant. In India, there is a high job turnover rate and much time needs to be spent training replacement employees. This cuts into company efficiency and profitability.

So what is the future of outsourcing? India might not be the future. The overall costs for offshore workers is getting more expensive and it may be time to bring the work home through insourcing, especially when there are so many workers available nearby. Only time will tell.