Mar 7, 2007

New Buzzwords: Nearshoring & Smartsourcing

In a San Jose Mercury News article, Nicole C. Wong writes that “nearshoring” is becoming a reality in the tech world.

From the article:

“Language fluency was a big reason some of
Sun Microsystems' (Nasdaq: SUNW) technical support jobs were moved from India to Nova Scotia.”

As previously written in
Call Centers: The Best And The Worst many of the tech giants are experiencing a low level of customer satisfaction from their call centers in India and Asia. So there is a rush to move some of these facilities to countries closer to the U.S. and that has less of a language problem.

It seems that the “powers” in these companies are convinced that it is impossible to operate these centers here and are determined to keep them out of the U.S.. Part of that attitude comes from groups that profit from offshoring and produce self-serving studies such as the one referenced in;
How Fortune 500 Companies Can Save $58 Billion a Year -- Just Send 1.5 Million More Jobs Overseas.

Smartsoucing is a term used in
Tom Koulopoulos’s latest book Smatsourcing. Mr. Koulopoulos illustrates that there will be a worker shortage of 9 million people by 2020 in the U.S. and companies have to offshore to fill the gap. My difficulty with that is he only uses the most base of numbers to get to that 9 million worker shortfall. Today the unemployment rate is very low and is considered by most economists that we are at full employment. But, in the United States, there are nearly 100 million people who aren’t working. Some are too young and some are too old but we estimate that nearly 20 million have just stopped looking for work because of a lack better paying jobs. Most of these people would become productive workers if jobs were available at a reasonable wage. By 2020 this number will grow and would more than cover his projected shortfall.

Part of the problem is that these companies are offshoring reducing the pool of reasonable paying positions.