Offshore Outsourcing

With the backlash in the USA against offshore outsourcing gathering strength, Trade Unions in the UK are launching their own investigation into the continuing phenomenon of UK companies moving jobs to cheaper labour centres abroad. The study comes at the same time as a government-backed report into the effects of outsourcing on the call-centre sector.
Companies looking for cheap labour, especially in technology and service industries, are increasingly taking advantage of the low labour costs and less rigorous employment legislation found in some overseas countries.
According to Amicus, the largest manufacturing union in the UK, the unions believe that the DTI needs to do more to prevent job losses resulting from outsourcing, although they claim not to be seeking a 'protectionist solution'.
Said Amicus:
"The aim of the investigation is to analyse how decision makers arrive at the business case which is driving companies to either offshore or make a commercial decision to stay within the UK. It would also seek evidence as to where cost savings are made and how and where those savings are channelled into training, re-skilling, high tech job creation and building foreign economies. An investigation would also widen the public debate on offshoring and show that the issue is not solely about call centres."

According to Amicus has warned that it will take strike action against "any organisations that cut UK jobs".
In parallel with the union's moves, the DTI has commissioned independent research on factors influencing competitiveness in the UK call centre industry. This will be mirrored by a more general independent public investigation into offshoring, announced by unions representing business process and call centre employees last week.
Needless to say, outsourcing is not popular among workers and unions in the USA and Western Europe. The backlash in the USA has been particularly strong, with over 20 states considering laws that would ban contracts for public sector works being awarded to non-Americans.
In the UK the reaction has been less pronounced. In December 2003 the Department of Trade and Industry published a report on the UK service sector stating that overall the UK is benefiting from the opportunities offered by the global market in services.
Trade and Industry Secretary Patricia Hewitt argued against short-term protectionist measures. Speaking in particular about the call-centre sector she said
"However strong the short-term case for protectionism appears to be, the long-term costs are greater - for consumers and for jobs."
She added
"In any case, we shouldn't fear trade. It's wrong to assume a job moved abroad means another worker on the dole here."
See also:
Outsourcing beyond India, OUT-LAW News, 10/06/2003
40% of US enterprises will try offshore IT outsourcing by 2004, says Gartner, OUT-LAW News, 25/06/2003
Indiana ditches Indian outsourcing contract, OUT-LAW News, 28/11/2003

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