MOVING WHITE-COLLAR JOBS 2

Outsourcing otherwise known as offshore or employee leasing or sub-contracting or employee leasing simply refers to a situation whereby one company enters into a contract with another company in a bid to benefit from the services which may have been offered by the employees (McIvor, 2005). Outsourcing further explains that the employees who are outsourced may not necessarily come from the company’s country. Offshore outsourcing, on the other hand, refers to a situation whereby a corporation come into a contract with another corporation or an individual overseas to benefit from the services which could have been provided by the company’s employees. The most popular departments for offshoring white-collar jobs are the legal, IT, human resource, customer support, human resource and accounting. Benefits of outsourcing are to reduce the cost of operation and increase profits, benefit from foreign labor at a relatively lower cost and due to other foreign countries offering talent education, partnering with these companies may provide a platform to learn about new technology, techniques, and tools which may not be available (Price 2007). While offshoring has greatly contributed to the American economic growth, it has led to massive loss of laying off of the American workforce thereby discouraging students from taking technical forces and demotivating them to pursue their talent, rather to focus on business courses.

South Korea’ GM Motors have benefited from offshoring. Research shows that the current workforce is only 37 million which is likely to decline to 33 million by 2030 Jun (2014). The decrease in population connotes that for South Korea to sustain the economic growth, it has to offshore the workforce. It is worth noting the 37 million workforces envelops the population of people aged between 15-64. Thus it means that the reduction in population by about 11% will automatically mean that the workforce is likely to be reduced the same number. GM Korea as at 2013 had a total number of 16, 919 employees (GM Korea 2013), by 2030 the number is likely to reduce by about 1991 employees. The reduction in the number of employees thus calls for offshoring so as to maintain and sustain the company growth. Secondly despite offshoring helping in the maintenance of economic growth due to population reduction, it also learns new techniques and technologies. Unlike in the US, offshoring is majorly meant to access labor force at a relatively lower price (Price, 2007) which ultimately means that the cost of production will go down. In this case, offshoring is a loss to the U.S. while benefiting Korea. If American companies outsource their employees, it means that their workforce is to some extents retrenched or denied job opportunities thus contributing to a high number of unemployed people. While in Korea, it is primarily, to sustain the economic growth because the venture calls for more than the population can give.

Moreover, offshoring enables the company to learn the new ways of making their products. GM Korea currently is known to produce Chevrolet Damas and Buick Models. From outsourcing, new skills and techniques will have provided and might bring an instance whereby they can invent a new brand. This argument is projected on the premise that outsourcing will bring a situation whereby there will be variation in skills and techniques, if this is brought together, definitely, a new model may be invented which will lead to a competitive advantage to other large companies like Hyundai. In comparison to the U.S., outsourcing has brought competitive advantages but in the same case, some companies such as IBM has laid off approximately more than 10,000 U.S. employees. In this case, the employees might consider going overseas in search of greener pastures and land a job in GM motors Korea. In the course of laying off 10,000 employees, it is very likely to lay off both the white-collar workers and the blue-collar jobs. As a result, the laid-off lot may end up seeking new opportunities overseas. Thus, they will contribute to the growth of South Korean Economy. Their skills will not benefit their country; rather it will benefit another country. In the same case, they might have learned one or two secrets which they may take to their South Korea GM thus contribute to its success. The U.S. will be the greatest loser at the expense of the South Korean gain.

The U.S. has invested heavily in research as compared to South Korea. Therefore, in an instance of retrenching American employees if favor due to outsourcing, the retrenched will thus seek on opportunities in developing countries such as South Korea will benefit from the workforce that is relatively highly trained than theirs. This instance will bring a case whereby the South Korean companies such as GM motors will take advantage of the workforce. The outsourced workforce will bring at relative growth to GM Korea that will give a rise to a competitive advantage as compared to the harm it will cause to the U.S. In the case, the new skills brought by the outsourced lot will then be taken away by the retrenched lot and later learned by the developing countries such as South Korea.

Due to the social and economic loss that may be attributed to the USA by the consistent outsourcing, it is practically necessary for the USA government to impose a regulation. Firstly, the government should impose a tariff to the outsourced lot and tax them relatively high than the natives (Berry 2005). The imposition of the high tax will result in a situation that is likely to scare foreigners from seeking contracts overseas. Secondly, the government should make the production conditions conducive for local development. For instance, they should consider providing most of the raw materials to the companies within the country. And lastly, the government should consider regulating the number of employees hired by the private sector as a well as the number of employees laid off in a single instance by the private sector.

In conclusion, offshoring has brought a lose-win situation to both economic states. While U.S.A retrenches the American employees, they can be hired elsewhere in a developing country and contribute greatly to that economic state. GM Korea should thus consider outsourcing so that to sustain the growth and to bring new techniques of production. Outsourcing may harm the country’s economic and social aspects. Thus, the government should consider putting in place necessary measures to curb any problem that may arise.

References Berry, J. (2005). Offshoring Opportunities: Strategies and Tactics for Global Competitiveness. New Jersey: John Wiley & Sons. Retrieved from: https://www.researchgate.net/publication/298693774_Offshoring_Opportunities_Strategies_and_Tactics_for_Global_Competitiveness Jun, K. (2014). South Korea May Need Up to 15 Million Immigrants, Study Says. The Wall Street Journal, 15. Retrieved from: http://blogs.wsj.com/korearealtime/2014/12/15/immigration-needed-to-bolster-workforce-study-says/ Korea, G. (2013, March 23). GM Korea Workforce. Retrieved from GM Korea: http://www.gm-korea.co.kr/gmkorea/index.do McIvor, R. (2005). The Outsourcing Process: Strategies for Evaluation and Management. Cambridge: Cambridge University Press,. Retrieved from: Price, A. (2007). Human Resource Management in a Business Context. Boston: Cengage Learning.