How Outsourcing Changed the Way We Do Business Globally

Published by Fair Trade Outsourcing on

Those unfamiliar with outsourcing who only relied on what the major news outlets tell the world may not know this. Globalization made outsourcing flourish, and the latter gradually changed the way we do business around the world. Today, outsourcing is not just a brief transactional exchange. It’s a partnership wherein the client and provider collaborate on a global scale and maintain a mutually beneficial relationship for many years.

#1 Outsourcing opened doors to a global workforce and allowed them to compete for jobs around the world.

Migrant workers have been doing odd jobs for minimum wages for many decades. It was during the late nineteenth and twentieth centuries that businesses started hiring migrant workers by the boatload. There were a few stragglers who did odd jobs for small businesses near the border, but the phenomenal growth of farming, mining, railroad construction, commercial fishing, and other industries in the West created a huge demand for inexpensive, unskilled, seasonal laborers.

Businesses used to import their workers from nearby countries or from their country’s colonies. Because of outsourcing, businesses can now hire both skilled and unskilled workers from any country in the world. When the local workforce lacks the skills required to do the job well, businesses can always look for skilled labor in other countries. They can hire them either as immigrant workers or as remote employees managed by an offshore company.

#2 Outsourcing blurred the lines drawn by cultural and language barriers and geographical boundaries.

Globalization brought businesses from different countries together. While one business provides skilled labor, the other pays for services rendered. This also brought together people from different cultures. They may speak English to communicate, but one group will always be speaking it as a second language.

Outsourcing staff often work with colleagues who have a different background than them, but the conflict that arises also lead to a greater understanding of each other’s life experiences, the values they adhere to, and the challenges they continually face. There will always be a few misunderstandings now and then, but the younger generation that works in outsourcing have a more expanded worldview because of their job.

#3 Outsourcing has taught many companies to change their managerial tactics to accommodate a diverse workforce.

Management techniques that worked perfectly with a homogeneous workforce now need to be modified to accommodate a more diverse group. For example, managers in the U.S. prefer to confront their erring employees straight away, but they will have to tread lightly when dealing with Asians. Being so blunt in their criticisms is not recommended; it only makes matters worse. It’s important for Asians to save face, which is connected to keeping their honor intact.

#4 The growth of the global outsourcing industry pushed governments to improve the quality of their workforce.

Countries that saw a huge growth in their GDP because of outsourcing were encouraged to develop industry-specific short courses to improve the skills and knowledge of their people. This means students receive a better education and workers get the chance to learn additional skills so they’ll be able to compete for outsourcing jobs. This ensures more jobs are available to their citizens. At the same time, this assures companies that they’ll always have a steady supply of qualified workers.

#5 Because of outsourcing, governments in developing countries are encouraged to create public policies and improve technological and physical infrastructure to fully address the needs of the workers and their employers.

The work environment and labor practices in outsourcing companies are different from what local businesses were used to. This presents a new set of problems for countries that are not prepared to accommodate the needs of foreign investors. Thus, a sound technological and physical infrastructure will be required, such as a faster digital network and more modern facilities. In addition, the growth of night shift work emphasizes the need for labor laws that will not only protect the rights of outsourcing workers but also their general health and well-being.

In effect, globalization and the continuing advancement of technology made outsourcing possible. It flourished because other countries made the effort to become more competitive.

In every country that has a flourishing outsourcing industry, the quality of life has improved for everyone. More people have access to better education, workers benefit from a more inclusive public policy, and the nation’s economy vastly improved to accommodate a rising middle-class.

While foreign businesses invest in these countries, their local entrepreneurs are also spurred on by the increase in purchasing power of highly skilled workers in outsourcing companies. All these changes led to positive changes in the way we think about business partnerships, international trade, and global collaboration.