Keeping jobs onshore – Consumers are taking notice

Written by Rick Beaudry on May 18, 2009

Companies considering off-shoring increasingly face a backlash from their customers.  The “keep jobs at home” movement has never had more consumer and political leverage — and the momentum is growing.  This is evidenced by organized groups such as a “USAJobs” petition and “Keep Jobs in Canada.” These are well-organized movements that gaining steam in many domestic economies.

Outsourcing non-core competencies (help desk, telemarketing, or software development), is still a very wise business strategy, but the delta in off-shore labor rates combined with the growing depth of educated workers in developing nations has made it difficult for companies to compete if their labor strategy involves domestic employees.

Companies today are looking for creative domestic labor strategies.  In particular, companies in the United States, Canada and in many other developed nations are combining government incentives and other creative strategies to keep jobs onshore with competitive local labor rates.

For instance, some companies are opening up offices, such as customer service or help desk centers, in areas of the United States and Canada with higher unemployment rates, to capitalize on the lower labor rates in those areas. Others are turning to colleges, which can provide inexpensive information technology help for businesses - the jobs stay in the country, and the students get real-world experience.

So, how do you get creative in keeping jobs onshore while competing at offshore labor rates? Some places to look:

  • Virtual employees – often people will work from home for less.   Work/life balance has tremendous appeal
  • Marginalized workers - underutilized subsets of the domestic workforce, such as students enrolled in vocational or cooperative programs, stay-at-home mothers returning to the workplace, and people on public assistance
  • Small towns – find those regions where the cost of living is significantly lower than the rest of the country (remote regions)
  • Areas of High Unemployment
  • Government subsidies for payroll and skills development - local government agencies often offer incentives such as tax credits, education dollars or payroll subsidies to the companies in exchange for bringing jobs to the area.

Now, if we were to combine all of those options above into a virtual worker, living in a small town hardest hit with unemployment challenges, who is a marginalized person (stay-at-home Mom, Person with Disabilities) and factoring in government incentives, it is easy to make the case for a competitive labor rate.

Additionally, a creative domestic labor solution helps companies avoid dealing with the major time zone differences as well as communication problems due to cultural and language barriers that come with outsourcing functions to a foreign country.  More people working brings a more robust economy.

Think outside the box and keep jobs onshore – no matter where you live. Companies should be careful not to sign binding outsourcing agreements that commit them to off-shore resources for the next 3-5 years.  They may find that the cost of the consumer backlash may far outweigh any perceive cost savings.  But more importantly, they may be missing an opportunity to achieve the same cost savings without running the risk of consumer anger.

I don’t see this issue going away any time soon.   The “world is flat,” as they say. Just as social responsibility is good for business, so to will be your labor strategy going forward.

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