Why offshoring turns out to be a sure-thing

Offshoring has come to sound like one of those awful business buzzwords, a ghastly euphemism employed to put a respectable managerial gloss on a practice that in reality amounts to grubby corporate slash-and-burn.
That’s pretty much how people have come to regard a practice popularly thought to involve closing something like a call centre in the UK and getting the job done for tuppence by wage-slaves on the other side of the world.
‘Exporting British jobs’ and ‘doing it on the cheap’ are among the more respectable descriptions for a practice that is widespread in the financial services industry. And you can’t really argue with the logic behind those statements, can you?
Well you can actually.
It turns out that ‘Doing it on the cheap’ has infact led to MORE jobs being created in the UK, not less.
How come? Well, according to some research carried out by economists at the University of Nottingham, sending routine work abroad has allowed businesses to become more efficient, make more money and invest in the work they still do here – to the point where they employ more people in the UK than they did before they offshored some of their activity.
This research is not some lightweight conjecture paid for by a corporate wallet trying to paper over serial restructuring. It’s a heavyweight analysis of what’s actually happened in 66,000 UK companies between 1996 and 2005.
Yes, the report’s authors say, jobs have indeed been lost. And people unable to adapt to the new skills needed for the jobs that remain do suffer.
But exporting one kind of job has led to the creation of many others, they say. According to their research, a whopping 100,000 UK jobs owe their existence to efficiencies gained through sending other jobs overseas.
Prof David Greenaway, a co-author of the report (and the man soon to take over as leader of the University of Nottingham) says there is a lesson for the UK Government in all this.
It should, he says, embrace offshoring while investing in continually upgrading the skills of UK workers so they can react to a changing economic landscape.
Incidentally, call centres being exported to places like India isn’t the whole story of offshoring, either. Infact, most ‘offshored’ jobs are in skilled areas like manufacturing, where part of a process is done in other European countries or the US.
What’s more quite a few countries actually offshore jobs to the UK because we are recognised for specific skills here.
So may be offshoring isn’t the cynical one-way traffic we thought it was. Bear that in mind next time your call gets re-routed to the Southern Hemisphere.