Offshoring Becoming Obsolete
U.S. business executives, including NOVO 1 CEO Mary Murcott, recently met in Washington, D.C. to discuss the future of offshoring in the U.S.
Many domestic companies seem to be thinking twice about being overseas. With the threat of consequences from the U.S. government and the advent of cloud-based, or hosted, technologies, the topic of bringing operations back to U.S. soil has been a hot one in recent months.
Insourcing is the New Outsourcing
A panel of U.S. business executives met in a roundtable conference with President Barack Obama and Vice President Joe Biden on January 11, 2012 to discuss tactics for insourcing: encouraging businesses to return their outsourced operations to the U.S. The panel included NOVO 1 CEO Mary Murcott, whose company was a founding member of the Jobs4America Coalition, which has been working since August 2011 to bring an estimated 100,000 call center jobs back into the U.S.
Murcott was also selected to participate in the “Insourcing American Jobs” forum and later appeared in the televised segment “Status of Businesses in the U.S.”, which also focused on how to approach this growing business trend.
In remarks following the roundtable discussion, President Obama praised the efforts of companies that have already made the decision to insource. He said, “These companies are choosing to invest in the one country with the most productive workers, best universities, and most creative and innovative entrepreneurs in the world: the United States of America.”
Murcott seems to share the President’s view.
During the “Insourcing American Jobs” forum, she stated that offshoring call centers is simply no longer profitable for U.S. businesses. After factoring in all relative costs and lost revenue, it is more expensive to maintain a call center overseas. Not to mention the inconvenience of language and cultural barriers, factors that have contributed to increased handle times and customer dissatisfaction.
Murcott also notes that many call center jobs have already returned to the U.S. – a trend that seems to be growing steadily as reports of call center expansions continue to make headlines.
Is Outsourcing Obsolete?
The evolution of hosted services in recent years has enabled many call centers to employ domestic agents (with the added bonus of creating jobs within the U.S.) for a fraction of offshoring costs.
In the press release for Kunnect’s new cloud-based software company president Fred Cote summed up what many executives may be feeling in regards to hosted contact centers and offshoring. Cote said, “Today, many organizations are understandably reluctant to offshore call center services — they would prefer to keep their business in the U.S., particularly in light of proposed legislation.”
Kunnect recently announced its affiliation with Jobs4America and supports driving awareness on the need for domestic job growth, as well as the role that cloud-based platforms may play in those efforts.
Is outsourcing obsolete? Not yet. But, looking at the strides that organizations like Jobs4America have made in just a few short months, it may be gone sooner than we think. Possibly by the end of 2012.
Why? In a brief statement during his remarks at the roundtable, President Obama alluded to plans for a series of new tax breaks for companies that help accelerate the return of jobs to the U.S., as well as an end special tax treatment for companies that outsource offshore. If, and when, these plans come through, the U.S. call center industry can expect to see major changes headed its way.
The value of offshoring jobs has been called into question over the last few years and CEO’s still engaging in this process are risking the security of their existing customers who may prefer to have their accounts in the hands of domestic employees rather than in some third world destination. While short term costs may be reduced, the potential future lost revenue could make offshoring the most expensive path a company could take.
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In: Business Stories · Tagged with: Advent, Barack Obama, Best Universities, Business Executives, Business Trend, Call Centers, Customer Dissatisfaction, Founding Member, Hot One, Inconvenience, Joe Biden, Novo 1, President Joe, Productive Workers, Relative Costs, Roundtable Conference, Segment, Soil, States Of America, United States Of America
