Issues with offshoring

Offshoring has become a large part of many companies' long term strategic plans, and seems to be growing in popularity. So what exactly is offshoring? Offshoring is the relocation by a company of a business process or operation from one country to another (Human Resource Management Jackson and Mathis). First I would like to take a look at why more companies are choosing to offshore some of their business processes or operations. Then look briefly at the types of jobs that are being offshored, as well as which countries seem to be the go to countries for offshoring. Finally let's look at some of the challenges offshoring creates for Human Resource Managers.

There are many reasons why companies are choosing to offshore, but the driving factors seem to be the potential for huge savings in wages and benefits. Another major reason is to take advantage of the intellectual talent that exists in the foreign markets. The types of jobs most commonly offshored are (eHow):

* IT and customer service/call centers-- both 29 percent.

* Computer programming--22 percent.

* Engineering--20 percent.

* Accounting--18 percent. Manufacturing/production--43 percent.

* Human resource--16 percent.

* Research and development--13 percent.

The countries that are benefiting from decisions to offshore, and are the recipients of the most offshored jobs, are as follows (HR and Offshoring):

* India--53 percent.

* Mexico--36 percent.

* China and Canada--both 33 percent.

* Brazil--18 percent

* Philippines--15 percent

Though offshoring as stated earlier, is growing in popularity as part of many companies strategic plans, often times HR is not involved in either the decision to offshore or the early planning stages of the offshoring process.(HR and Offshoring). In my opinion, it is a huge mistake not to get HR involved early on in the decision process. I would like to take a look at some of the challenges HR faces when companies decide to offshore.

The first challenge that comes to mind is dealing with the displaced employees in the home country. It is my opinion that when the news first breaks about a company offshoring, there is a lot of back lash from current employees due to feelings of anger at being replaced with someone in a foreign country. There are feelings of fear as to what the future will hold, how they will feed their families, make their house payments etc. I would think there is a lot of resentment and loss of value, as many employees often feel that they have given their heart and soul to the company, and that by choosing to offshore their jobs, the company has stabbed them in the back. Though it is a challenge, HR is vital in helping these employees by helping prepare them for the next phases of their careers. If HR is brought into the decision process from the beginning, they have a chance to review the employees that are going to be affected, and determine if they have the skills and talent that could add value in a different area of the company. There might be the opportunity for early retirement/separation packages that could help lessen the impact. Training could be arranged to assist employees with resume writing, and interviewing techniques to help them with looking for new employment. HR can help protect companies from legal issues, by making sure that the company is in compliance with labor laws when layoffs are going to occur on the home front.

In the exploratory stage of offshoring, HR needs to investigate and become familiar with the local employment law, especially the obligations