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Ethical Outsourcing

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  • Ethical Outsourcing

    Outsourcing 'guru' Mark Anastasi talks a lot about outsourcing to the cheapest places possible. His favorite outsourcing source for office tasks is Manila, Philippines. I don't know if he still does it, but he he claimed to search for people looking for task-based jobs on the Manila section of Craiglist. Since there is no apparent regulation of this in that country, he can pay at his own estimation of what he wants to afford.

    How ethical do you think is this outsourcing process? Perhaps I am cynical, but it seems like he's saying he can pay pennies / maybe a few dollars a day in order to get office tasks done. This means he doesn't have to pay an office manager or even an office assistant. Sounds nice, but it precludes any long term benefits, much less things like insurance, for his workers. How do you reconcile this with ethical outsourcing? Is there a way to perhaps find the countries where people have the most need, then outsource these types of tasks there?

  • #2
    Re: Ethical Outsourcing

    I am from the Philippines and I know for a fact that our standard salary here of less than $10 per day is way below the world standards. If a foreign company will come in and hire people for a higher salary then it is clearly to our advantage as well as the employer had saved from the wages. Another advantage is the technology exchange where the Filipinos learn on the job that they become equipped with new knowledge that later on they can use for applying to other companies for local or foreign employment.

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    • #3
      Re: Ethical Outsourcing

      Originally posted by Corzhens View Post
      I am from the Philippines and I know for a fact that our standard salary here of less than $10 per day is way below the world standards. If a foreign company will come in and hire people for a higher salary then it is clearly to our advantage as well as the employer had saved from the wages. Another advantage is the technology exchange where the Filipinos learn on the job that they become equipped with new knowledge that later on they can use for applying to other companies for local or foreign employment.
      Thank you for the awesome reply. Now my only issue is the logistics of setting it up and making sure I have all the federal regulations set up properly. As a native of the Philippines, what would you recommend I read or who should I contact to make sure I set it up correctly? I really want to begin by June of this year, if possible. And since I am passionate about ethical outsourcing, how to I make sure the maximum amount of people who need employment or an extra source of income, get exposed to the job opportunity? I mean besides Craigslist, how do I reach the people who need jobs the most? I would be happy if this can help families in need earn additional income.

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      • #4
        Re: Ethical Outsourcing

        Originally posted by Clark View Post
        Thank you for the awesome reply. Now my only issue is the logistics of setting it up and making sure I have all the federal regulations set up properly. As a native of the Philippines, what would you recommend I read or who should I contact to make sure I set it up correctly? I really want to begin by June of this year, if possible. And since I am passionate about ethical outsourcing, how to I make sure the maximum amount of people who need employment or an extra source of income, get exposed to the job opportunity? I mean besides Craigslist, how do I reach the people who need jobs the most? I would be happy if this can help families in need earn additional income.
        It depends on your kind of business. If you are talking of a call center, it is already popular here and all you need to do is to advertise in the newspaper or even in social media. What the call centers do here is to post a huge tarpaulin in the main road and surely they get a horde of applicants daily. But that's putting the cart before the horse. You have to establish your business first by getting scouting for an office, registering with the SEC (securities and exchange commission, barangay clearance for the local community, city permit from the mayor's office, BIR registration for the revenue district). You can hire a liaison officer to do those chore of registration process.

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        • #5
          Re: Ethical Outsourcing

          If a company offers a salary higher then what the people in the nation being outsourced to would normally get it appears that it is a net win if the company saves money in the process. That isn't always the case though. If jobs were lost in the company's nation to outsource labor it can have negative economic impact on that nation. There are people in at least two nations affected by corporate outsourcing decisions especially if it involves moving existing jobs over sea.

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          • #6
            Re: Ethical Outsourcing

            Originally posted by Corzhens View Post
            It depends on your kind of business. If you are talking of a call center, it is already popular here and all you need to do is to advertise in the newspaper or even in social media. What the call centers do here is to post a huge tarpaulin in the main road and surely they get a horde of applicants daily. But that's putting the cart before the horse. You have to establish your business first by getting scouting for an office, registering with the SEC (securities and exchange commission, barangay clearance for the local community, city permit from the mayor's office, BIR registration for the revenue district). You can hire a liaison officer to do those chore of registration process.
            The bolded is an excellent outline. I definitely have been guilty of putting the "cart before the horse" when I was younger because I was a natural marketer, and somewhat of an idealist. The idealism I think is fine in terms of wanting to help other people and be ethical in the first place. But it can also be silly of me to be idealistic and not do my due diligence in being practical and using common sense to set up the business in the first place. Being idealistic, but dumb, wastes money and helps no one.

            Back to the point, it looks like the first thing to do would indeed be to looking into the Philippines SEC as well as look for the right city to set up base in and obtain a permit. I think that is where I will start. It's not as simple to set up as people think, but I think it's far better in the long run than paying people pennies on Craigslist. And I think that the pay off in terms of productivity will probably be higher. I'm definitely doing research and I will keep you posted as this progresses.

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            • #7
              Re: Ethical Outsourcing

              It would very much be ethical if you, as a foreigner, put up your business overseas without having to sack or hire from your own workforce in your home country. If you don't have a company in your home state, you have the discretion to hire anyone you think would help you with your business interests. Alternatives to Craiglist: Fiberr, ODesk (name has changed now, though), ELance, Staff.com and more.

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              • #8
                Re: Ethical Outsourcing

                Originally posted by xTinx View Post
                It would very much be ethical if you, as a foreigner, put up your business overseas without having to sack or hire from your own workforce in your home country. If you don't have a company in your home state, you have the discretion to hire anyone you think would help you with your business interests. Alternatives to Craiglist: Fiberr, ODesk (name has changed now, though), ELance, Staff.com and more.
                Over here, I don't think there is a case like that - terminating employees in favor of outsourcing. What they do is to tranfer the current employees in that particular section (intended for outsourcing) before they do the actual outsourcing. And the transferred employees still continue doing their chore in their original section until the outsource is put into place. Outsourcing is only being done by big companies because small companies cannot afford to transfer their employees for lack of vacancy.

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                • #9
                  Re: Ethical Outsourcing

                  I think outsourcing is such a strange concept that over the next few decades it won't even be relevant. All that outsourcing really does is change the value of money, which is just a sign that the world doesn't really understand what things are worth quite yet. In other words, there is no standard for the value of the human hour, there is just an opinion of it from place to place. If that were the case, there'd be absolutely no reason that outsourcing made any sense.

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                  • #10
                    Re: Ethical Outsourcing

                    Originally posted by TheFunneler View Post
                    I think outsourcing is such a strange concept that over the next few decades it won't even be relevant. All that outsourcing really does is change the value of money, which is just a sign that the world doesn't really understand what things are worth quite yet. In other words, there is no standard for the value of the human hour, there is just an opinion of it from place to place. If that were the case, there'd be absolutely no reason that outsourcing made any sense.
                    I disagree. There are local and national measures of what time and money is worth. Trying to turn it into a global value is neither possible or needed.

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                    • #11
                      Re: Ethical Outsourcing

                      I don't see the ethics of outsourcing being the responsibility of the employer. If one country's people are getting taken advantage of then it is the government's job to give them better options. Better yet, the government should already have been doing a good enough job to not put their people in a state of easy exploitation to begin with.

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                      • #12
                        Re: Ethical Outsourcing

                        Originally posted by Norm View Post
                        I don't see the ethics of outsourcing being the responsibility of the employer. If one country's people are getting taken advantage of then it is the government's job to give them better options. Better yet, the government should already have been doing a good enough job to not put their people in a state of easy exploitation to begin with.
                        We really cannot say that people of the host country are being taken advantage by the outsourcing country because in any way you look at it, those foreign businesses are giving jobs to the locals. The Philippines is well-known for call center agents, claiming we have the best work force that's why almost 5% of employment in the city is the contribution of those foreign companies. With the exploitation, it may not be the right word because the call center companies are giving high salaries to the call center agents that is equivalent to a supervisor's wage in regular offices.

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                        • #13
                          Re: Ethical Outsourcing

                          Originally posted by Corzhens View Post
                          We really cannot say that people of the host country are being taken advantage by the outsourcing country because in any way you look at it, those foreign businesses are giving jobs to the locals. The Philippines is well-known for call center agents, claiming we have the best work force that's why almost 5% of employment in the city is the contribution of those foreign companies. With the exploitation, it may not be the right word because the call center companies are giving high salaries to the call center agents that is equivalent to a supervisor's wage in regular offices.
                          I agree completely. I think companies provide these opportunities and any exploitation is the responsibility of the government to combat, not a business that doesn't even live in the same country and has no idea or duty to keep the locals protected. It's the government's responsibility to set up the rules and like I have mentioned, setting a good enough standard of living that exploitation would become less appealing just for survival.

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                          • #14
                            Re: Ethical Outsourcing

                            The thing about outsourcing is that a lot of times, outsourced work pays double or even triple what these workers might make. It might seem sketchy or exploitative when considering what the job is worth, but the entire reason that it works is because it is often a fantastic deal for the people doing the work compared to what they have available.

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                            • #15
                              Re: Ethical Outsourcing

                              Originally posted by TheFunneler View Post
                              The thing about outsourcing is that a lot of times, outsourced work pays double or even triple what these workers might make. It might seem sketchy or exploitative when considering what the job is worth, but the entire reason that it works is because it is often a fantastic deal for the people doing the work compared to what they have available.
                              Agreed. I know this is the case for most but I wonder if it's true for all though. I imagine the people in China making iPhones don't get paid that much, not only in relation to the job but also as a standard in their locality.

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