On a recent news at Los Angeles Times, some American companies are now going onshoring. As you know, some of the services such as call centers, and other secondary services such as programming have been offshored to countries like India, Philippines, China, etc. so that American companies can cut costs. The workforce is cheaper abroad. Among the disadvantages in doing so, especially in the case of a call center, is that consumers have been complaining about the “English” of the people that they talked to on the other line.
Companies are now returning these kind of services here in the United States by establishing their Information Technology branch in a town where the standard of living is not high. For example, Norhtrop Grumman Corp opened its IT branch in Corsicana, Texas, and pays their software engineers at a starting salary of $42,000. The same job would cost $56,000 to start in Los Angeles. Thus, saving around 40% in labor that is pretty much comparable to the savings that they can get when they offshore the job in India. In addition, the standard of living is so low that employees will take the job and move there (rather than get laid off). For example, a three-bedroom home in Corsicana sells for about $125,000, compared with about $700,000 for a similar place in Los Angeles.
List of Companies that are trading offshoring to onshoring:
- Xpanxion – test operations relocating to Kearney Nebraska from Pune, India
- Dell Inc – technical support center relocating to Twins Falls, Idaho
- Accenture – document processing center relocating to an Indian reservation in Oregon.
- Wipro Technologies (based in India) – establishing its design center in Atlanta.
I am really glad to see that companies would start to realize that they should bring back the jobs to the American people instead of taking them away. This, indeed will help stimulate the economy, especially on some of the unknown towns in the United States!
Source: Los Angeles Times