How Does Outsourcing Impact the Economy?
If outsourcing is done right, it will benefit at least two economies. Many people out of the business sector have a hostile attitude toward outsourcing. They claim that such practice takes the jobs away. However, in various cases, outsourcing is crucial to help a business focus on what it’s important, becoming more competitive and profitable. If a company fails to do this, the local economy will lose way more than the outsourced jobs.
If a company succeeds to grow and become profitable, it will attract important investors. The latter will not only help the business expand further but also have an impact on the local economy. Another scenario is that a successful business in one sector may also attract foreign companies that are looking for an outsourcing partner. If ample talent is available and the demand is high, there will be options for many other businesses to start operating.
On the other hand, there are a lot of people that criticize outsourcing as it relies on the affordable workforce in order to reduce costs. Wages in outsourcing destinations can appear very low to people living in the US, Japan, or the Netherlands. There are countries like Albania where people employed in the Business Process Outsourcing (BPO) are paid more than the median salary.
Almost the entire workforce employed in the sector consists of students that need a source of revenue to pay for their education and to provide for their other needs. BPOs offer flexible shits that allow them to complete university, to pay bills and rent while working. On the other hand, the cost of living in Albania is 80 percent lower than in the UK. The country enjoys the sunny and warm Mediterranean climate and has a 400 km long coastline in the Adriatic and Ionian seas. Therefore, it’s easy to achieve and maintain a healthy work-life balance.
If the BPO industry wouldn’t expand in first place in Albania, education’s financial cost would have a toll on low-income families.
Nowadays, the sector that started with small call centers is among the largest employers in the country. Companies that specialize in BPOs and KPOs provide services such as data entry, market research, design, marketing, analytics, ICT, law, accounting and finance, HR and much more.
The well-established outsourcing sector will help to attract more business partners from advanced economies. Therefore, the sector will require qualified experts. It will offer career prospects and development and not short-term employment.