About a year ago we warned companies to beware of chasing cheap labor around the world… "globetrotting" as we called it.
Ahh… to be a world tourist. Globetrotting from country to country in search of lower direct labor costs to help offset unrecognized internal process waste cost. The first stop was Mexico, then on to Honduras or the Dominican Republic. After a while there were too many gringos there as well, so how about a nice cruise over to Asia. China’s pretty nice… lots of cheap labor… that should do just fine for a while. Uh oh. It’s only been a few years but something’s going wrong. Why are labor costs shooting up?
One aspect of this phenomenom I didn’t mention directly is that the rapidly-growing Chinese… and Indian… companies that benefited from offshore outsourcing would soon face those competitive pressures as well. Not just the multi-national that contracted with them. A regular reader from Ontario forwarded an article on how India itself is now facing the pains of offshore outsourcing.
Indian outsourcing companies are shifting some of their operations to China, the Philippines, Vietnam and Kenya in a bid to stay competitive as higher wages, expensive property prices and a rising rupee eat into profits. Costs in India are climbing on the back of a robust economy that has lured skilled workers to other sectors, forcing companies to look elsewhere to stay in business.
Robust economies can be a pain in the butt, can’t they? We feel your pain. Uh… wait a minute…
Where are they going?
India’s English-speaking workforce, a big factor in winning call-centre jobs, faces competition from countries such as Kenya. "When compared to India, we are better off in terms of salary and cost per seat, and we have a large pool of Kenyans with clear accents," said Bitange Ndemo, permanent secretary in Kenya’s Information Ministry.
Haven’t I heard that before? Stay tuned… in another two or three years I’ll probably be writing a post titled "More Globetrotting… From Kenya."
I know the frequent flyer miles are a nice bonus, but instead of chasing low labor costs around the world, how about focusing inward for a bit. How simple can you make your business? Are you fully utilizing the creative ability of your "greatest asset"… supposedly your employees? Or is all that knowledge and experience simply a cost on your traditional accounting books? Maybe you should hop a flight, today or tomorrow actually, for Orlando to attend the Lean Accounting Summit this Thursday and Friday.