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December 22, 2004

Offshoring Versus Homeshoring

In 2004, many companies in the United States turned to the outsourcing of low value-added labor abroad to countries such as India. This continues to be an attempt to maximize profits while remaining competitive. The general public, however, has not looked favorably on outsourcing, as they claim it puts American jobs at risk and speaking with customer service agents who are in a different country can sometimes be unpleasant. Some companies have recently bucked this outsourcing trend by turning instead to homesourcing, or telecommuting, allowing their employees to work from home, thus saving on the the costs of having to rent office space and allowing their employees to have more free time because they no longer have to commute.

According to Rich Smith at the Motley Fool:

What's more, telecommuting is a highly prized "job benefit" that can increase employees' job satisfaction and reduce employee turnover (and related costs). Finally, it makes little difference whether an employee taking reservations for a JetBlue Airways (Nasdaq: JBLU) flight out of JFK lives in New York City or Kansas City. And hiring workers to do a job in a low-cost U.S. state allows JetBlue to save on salaries without shipping jobs to Bangalore.

Read more: Outsourcing Dons Pajamas

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