Tuesday, April 7, 2009

Reverse Outsourcing


Did you notice the lower volume of attendees at APEX this year? For an editor, this gives us more time to interview exhibitors, conduct panels, talk to leaders in the industry, and grant awards for innovative new products and services. For those involved in shipping large pieces of equipment and flying sales staff to Las Vegas, the experience takes on a whole new atmosphere. Although crowds were thin on the show floor — Denny McGuirk, president of IPC, estimated 20 to 25% down in registrations from last year — those seeking an education filled up the technical sessions. Education makes employees more valuable to any company.

No one doubts that business in the U.S. has limped through a weak period. And in electronics, recent news revealed IBM’s Project Match, which offers laid-off U.S. and Canadian workers the chance to apply for jobs at the company’s India location and other areas of low-cost labor around the globe. IBM would help with visas and moving costs, but the salaries would be the same as those within these low-wage areas.

Who would jump at moving somewhere else globally to earn less? At having themselves “outsourced” along with their job? Most of us drag our feet at moving between U.S. states for increased income. Let’s face it, this is a flat year globally for most EMS providers and OEMs already. Most industry analysts project negative growth, if any. And survival can spur life changes; that is certain.

Employees working at IBM in the U.S. must have known about the Wall Street Journal’s story last month announcing that IBM planned to lay off 5,000 U.S. employees with many of the jobs being transferred to India. Foreign workers account for 71% of IBM’s nearly 400,000 employees at present, WSJ said.

If it’s a global economic change, then we already know about that. The question is, are we improving the lives of individuals by taking them away from their neighbors, families and homes only to pay them a lower wage? What would be the difference if foreign workers came to places where wages were higher, but families were distant? The problem with outsourcing employees is that all good business decisions are often poor choices for people. As people, do we raise the middle class if we lower incomes? Do we strengthen families by separating them?

As I write this, on my desk sits an invitation to teach English as a second language on a distant continent. It might be an adventure...

Gail Flower, editor-at-large

6 comments:

  1. I assume your question "What would be the difference if foreign workers came to places where wages were higher, but families were distant?" is rhetorical, but on the off chance it isn't: The U.S. is rampant with this issue, in fact, foreign workers come from everywhere on the planet seeking better paying jobs and a better life. They take advantage of our social welfare programs, our higher paying jobs, and until recently, our strong economy. Maybe instead of sending U.S. workers to lower cost countries, send the ones that are here on work visas. I often hear that the jobs that illegal immigrants (and legal) are willing to do, U.S. born folks aren't. I don't it. The economy will force things back to what they should be: Work so you can earn enough to survive on. Now, I'll be the first to admit, I'm not going to go out and start looking at "Burger Flipping" jobs if I lose mine tomorrow, but I wouldn't be adverse to going back to working as an assembler or tech on an assembly line if it meant feeding my family. Why doesn't IBM reduce wages and benefits but keep their employees here? If it were up to me, I'd do my same job at less money rather than live in a country where I don't speak the language, I don't know the customs and there are 1,000,000 native speaking, culturally sound folks to take my job away from me.

    At any rate, I suppose it's possible that Mexico will start paying for a border fence to work illegally as a Process Engineers, Design Engineers, or company executives. At least the Coronas are still cheap down there...

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  2. Gail:
    I'm a Mexican SMT Engineer and I understand your concern, but I strongly believe that we as society pushed the industry and companies to take this road. Let me explain you how. When we, as small investors (mutual founds, 401K etc) ask for super good earnings from our money without asking these companies to invest in our own country or our own company. So they as CEOs or presidents of the companies decide to invest the money where they can get those super earnings by hiring cheap labor in every level. I think is sad but true. And I think it will take some good years before the whole economy level itself and an Eng from India, China, Mexico or some other country get the same level of payment as a US or European Eng. When that happen then it will not be attractive to move companies from one country to another, that is my humble opinion.

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  3. (Corrected mistakes...should have used the preview button!)I assume your question "What would be the difference if foreign workers came to places where wages were higher, but families were distant?" is rhetorical, but on the off chance it isn't: The U.S. is rampant with this issue, in fact, foreign workers come from everywhere on the planet seeking better paying jobs and a better life. They take advantage of our social welfare programs, our higher paying jobs, and until recently, our strong economy. Maybe instead of sending U.S. workers to lower cost countries, send the ones that are here on work visas. I often hear that the jobs that illegal immigrants (and legal) are willing to do, U.S. born folks aren't. I don't believe that. The economy will force things back to what they should be: Work so you can earn enough to survive on. Now, I'll be the first to admit, I'm not going to go out and start looking at "Burger Flipping" jobs if I lose mine tomorrow, but I wouldn't be adverse to going back to working as an assembler or tech on an assembly line if it meant feeding my family. Why doesn't IBM reduce wages and benefits but keep their employees here? If it were up to me, I'd do my same job at less money rather than live in a country where I don't speak the language, I don't know the customs and there are 1,000,000 native speaking, culturally sound folks to take my job away from me.

    At any rate, I suppose it's possible that Mexico will start paying for a border fence to keep Americans from sneaking over and working illegally as a Process Engineers, Design Engineers, or company executives. At least the Coronas are still cheap down there...

    ReplyDelete
  4. I don't mine taking a pay cut. I been in this industry for 15+ years. I have a BS in Mechanical Engineering with a major in Thermodynamics/Energy. I haven't work in this field since I graduated. However, my knowledge applies to the industry. The problem has been convince the bosses to get an opportunity to apply this knowledge.

    For almost two year I was the SMT Project Engineer for the X-Box in Guadalajara Mexico. I travel from the States to Mexico and every month I got a weekend to see my family.

    I enjoyed this and met wonderful people. I don't mind traveling and staying long period of time in a foreign country. What I will never do is move my family to a country with a different culture. It is tough between the States where each one have different laws and cultures. e.g. I never saw drivers in San Diego running a Red Light, however here in Tampa/Orlando I have to way for the two to three cars that ran the red light. Also, food is different too and the English is very different. So, imaging a whole new country, and without a valid residency in one of the 50 states and DC we will lost the right of voting for the President and our legislator becoming a second class citizens.

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  5. Why not? It could be an adventure. Maybe it could be a lead to a higher position for someone, and if you're single, there's no family to leave behind. I took a job in central-eastern Europe for a slightly-higher-than-local wage, but not even close to a US one, and loved it. It was a great experience to live aboad. Though I didn't speak the language when I got there, it wasn't a problem and I eventually became fluent. It's maybe not a realistic possibility for everyone, but some adventurous employees might consider the offer.

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  6. I would agree that it may be a fun adventure to give it a try if you had no real ties at home. But if you have a family and other obligations, it might make it really hard to uproot everything and do something like that. I wouldn't do it unless there were some sort of chance I could have my old job back when the economical tide shifts (lets hope it does).

    ReplyDelete