Who Benefits from US Outsourcing?

To an average person, US outsourcing seems to be a waste of time, money and effort. It might seem to be a complicated set-up when there are available human resources that can provide such services in their own country. To a politician, it is an issue that he can use to make a point towards nationalism that being US companies should provide jobs for their countrymen. There are various negative reactions to US outsourcing. However, for a businessman, this is like manna from heaven. US businesses are the first beneficiaries of outsourcing.

They can outsource other functions that are not core functions of the company to other companies overseas such as financial and administration, human resources, customer services and accounting services. The functions are important but outsourcing them can produce better results in terms of cost-reduction and quality services. Moreover, small US businesses also benefit from the outsourcing scheme especially if they lack the expertise to implement software administration or accounting functions.

The second beneficiary of outsourcing is the country where the outsourcing company is based. These countries have many highly intelligent graduates but no job opportunity available. Outsourcing therefore is a good opportunity for them to earn comparable salaries in their countries without leaving their home. Outsourcing is a win-win situation for both US businesses and outsourcing companies from overseas. The US companies provide salaries that are lower compared to the standard salaries in the US whereas the employees from outsourcing companies are quite satisfied with their salaries, which are higher in their country s standards.

The debate over the effects of US outsourcing continues among politicians and economists. On one side is the argument that free trade which includes outsourcing benefits US businesses and its citizenry in the long run due to gains from free trade.  Whereas on the other side is the fact that US are losing white-collar jobs to outsourcing companies.