Outsourcing Times

Air NZ Outsourcing Plan Hits Turbulence

The fear of outsourcing virus seems to have hit New Zealand now. Recently, the union representing 1700 Air New Zealand workers whose jobs are under threat said it planned to go ahead with an Employment Court hearing on the matter. Radionz.co.nz reports:

The Engineering, Printing and Manufacturing Union says it has been unable to reach agreement with the airline on Tuesday on the company's plans to outsource its passenger and ground services. The two parties have been in two days of talks after an Employment Court hearing on the dispute was adjourned.

Read more: Union to go to court 0ver Air NZ outsourcing plan

BBC Staff Wakes Up To Outsourcing Trend

Staff at the British Broadcasting Corporation (BBC) licensing headquarters in Bristol are on a two-day strike to protest against outsourcing work to India. The workers fear the switch of work could lead to hundreds of job losses in Britain. Indiaenews.com reports:

'We know that UK customers do not want their bank and other personal details sent abroad and we call upon the BBC to intervene in this matter and reverse the decision,' worker's union assistant secretary Andy Furey was quoted by Ireland online website.

Read more: BBC staff to strike over outsourcing to India

FSSA Outsourcing Plan Hits Turbulence

The FSSA reorganization and outsourcing plan is meeting with a lot of opposition. Recently state caseworkers, their union leaders, social advocates and others accused Gov. Mitch Daniels’ administration of lying, fudging statistics and endangering needy and vulnerable Hoosiers to make its case for outsourcing the application process for food stamps and other public benefits. Fortwayne.com reports:

The Daniels plan envisions improving the delivery of the public safety-net benefits system received by one in six Hoosiers by making it easier to submit and process applications through the Internet, e-mail, telephone call centers, and faxes. It also aims to use computers to drive the process with self-surveys, instead of time-consuming interviews, to ease caseworkers’ paperwork and reduce error and fraud.

Read more: 200 protest outsourcing benefit plan

Bell Layoff Leads To Ugly Union Scenes

Outsourcing, while good for companies that receive orders, can be pretty ugly for laid-off workers of firms like Cincinnati Bell. The company recently laid off 45 workers, prompting a demonstration by union members. They are accusing the company of increasing its profits and executive pay at the expense of employees.

According to a Cincinnati Bell spokesman, the layoffs followed failed negotiations with the Communications Workers of America to achieve cost reductions by other means. The company is now proceeding with an outsourcing plan for certain support functions in the company. Employees of outsourcing firms will assume the jobs of mechanics, truck drivers, supply workers and clerks. News.enquirer.com reports:

The union also cited the irony of layoffs when the company reported $22 million in third-quarter profit and paid $1.6 million in bonuses to its five highest-paid officers. "The loss of jobs is inevitable," said Dottie Vories, a 16-year employee who was laid off Friday from her $22-an-hour clerical job in the company's Engineering Department, "but we were never treated with respect or integrity."

Read more: Union protests Bell layoff

Offshore success bites into UK tech workforce

Research analyst firm Ovum has thrown up some alarming facts for the UK job scenario in the technology sector. According to the report, the number of offshore workers delivering work to the UK organizations will double within a period of three years, touching a figure of 130,000 offshore workers. On the flip side of the coin, there is going to be a 6% drop in the number of onshore software and IT services staff.

While there is a steady number of UK-based workers being absorbed by offshore companies, this job channel is not enough to counter the fall in UK-based jobs in the IT and software sector.

Ovum senior analyst Phil Codling makes a frightening statement on Silicon.com:

We face the prospect of a skills time-bomb in IT. It is not clear where the next generation of highly-skilled, experienced programme and project managers will come from.

You need a “versatilist” to ride the outsourcing storm

IT professionals in America are constantly living in fear of losing their jobs; at least, that's the feeling one gets after reading articles about jobs migrating offshore because of outsourcing. This might be just going over-the-board a bit, but the concern is certainly there, and the fraternity of IT professionals has accepted the fact that outsourcing is here to stay, and is devising ways of getting around the outsourcing storm and keeping IT jobs afloat.

The consensus is that the specialized IT professional will find it difficult to survive, because his or her specialization can lend itself to only a limited number of jobs. A more practical solution is to specialize in a particular area of IT expertise, and then diversify to other related areas of business processes, thus widening the job profile. In other words, if you are a versatilist, you can find favor with company CEOs.

To effectively surf the outsourcing wave, companies are looking for greater maneuverability and agility in their workforce; if one employee can fit into different job portfolios, that employee is much more valuable than the specialist who has a fairly narrow job path to traverse. Datamation quotes Morello of research firm Gartner:

The versatilist can look like many things. While a combination of business and tech is one excellent choice, there are other versatile skill sets a tech professional can acquire to be more marketable.

Did Outsourcing Raise Level of Wages?

According to the economists in the United States, outsourcing has helped raise real wages for low-skilled US workers. It happened despite the negative publicity and political controversies. There has been a view that transferring US jobs abroad has hurt American workers' wellbeing. However, this charge has been countered by the economists. They argue that wages for the least-skilled jobs has been rising for the past few years, as outsourcing boosted productivity in the organizations. Evidences suggest that the productivity effect helped raise real wages for such workers.

Read our pos titled "Is the Future of BPO Industry Secure in India?" to know about BPO operations.

Outsourcing storm brewing in schools

Controversy and outsourcing have almost gone hand-in-hand, but in most industries the logistics have worked in favor of outsourcing. In schools, too, considerations of saving money and releasing in-house resources for core school requisites are beginning to work their way through controversial roadblocks.

School authorities in Michigan want to concentrate on their main business of educating students, and are happy to push the management of ancillary services—such as food, custodial, and bus services—off their plate. Private companies are willing to step in, offering these services at competitive rates.

The school authorities might be happy, but people who are losing their jobs to private companies are certainly outraged. For example, 29 custodians and 4 food service workers have lost their jobs in Garden City alone. Yes, some of these workers will get absorbed by the private service providers, but at much lower wages.

Quite naturally, jobless workers are spearheading the move to recall board members in several schools, including Garden City Board of Education and Lakeview Public Schools in St. Clair Shores.

Detroit Free Press has much more on this controversy.

Local Mid Michigan company speaks the outsourcing language

In the midst of the outsourcing whirlwind, companies are realigning their business processes and leaning the outsourcing way. Mid Michigan, which is already laden with economic hardships and job loss, is about to see yet another local company seeking the outsourcing route.

On-Line Die & Engineering Inc. has had its home in South Dort Highway in Burton for the last six years, but talks are rife about the company leaving the Flint area. Although there is no official word on the move, anxiety waves are already riding high in the worker fraternity. ABC News reports:

Workers say in the last month, owners have approached certain high-end workers from the design and program departments and offered them a continuing job but in Mexico.

ABN makes outsourcing its weapon for growth

ABN Amro, the Dutch bank takes the outsourcing route to cut costs and increase profits with a resulting 2400 job cuts. ABN witnessed a 12 percent rise in profits boosted through the revenue from Italy's Antonveneta which was acquired after a controversial bid battle. Australian reports:

ABN AMRO would cut 2400 jobs by combining back-office operations and shifting them mostly to India, the big Dutch bank said as it lifted its annual cost savings goal by E150 million ($246 million) to E900 million from 2008.