How do you convince first timers that outsourcing will solve their intractable business problems? Outsourcing community, please help me!
The back story: As most of you know, I live in Las Vegas. Having been one of the biggest beneficiaries of the economic boom, Clark County, the municipality we live in, is paying the price. Big time.
Clark County, for the last three years, has been the per capita foreclosure capital of the U.S. That translates into a revenue shortfall to the state because of precipitously declining property taxes. The state legislature had no choice but to slash all state services to the bone.
Clark County School District, the fifth largest school district in America, has been hit with a sledge hammer. Yet the citizens of Las Vegas still want the best education possible for their children. Fortunately the privately-funded UCLA Dream Foundation hired Gibson Consulting to do an efficiency study to determine the best uses of the meager funds the district has to improve student performance at the lowest cost.
Surprise. Surpise. One of the easiest solutions was to outsource. The report found it could save $5.6 million in salaries and $4.8 million in benefits annually if it outsourced the district’s 1,522 custodians and bus drivers. That’s saving $36 million over five years.
I graduated from high school in 1970, so it’s been a while since I’ve set foot in those teenage temples of learning. However, as I vaguely recall, the teachers and coaches were the ones impressing, inspiring, encouraging and educating me. I specifically remember Maureen Armbruster, who was the sponsor of the school newspaper where I was the editor. And that was 1968. I don’t remember the bus driver and never even saw a custodian.
However, the uproar in Clark County has been deafening. How dare the district even consider outsourcing those holy, yet in my opinion, wholly unimportant jobs? In my view, all the money available should be going to teachers who actually educate the kids, not to unionized drivers who get them there. To me this is intuitively obvious. But I’m the only one who seems to get it.
The district did ask the union to make concessions equal to the outsourcing savings. Now that would work for me, too. However, so far the union has been intractable.
What’s really ironic is these jobs are not going overseas. Someone else in our community will have to do them! It’s hard to drive a school bus from India or China.
Here are my questions:
- How can I educate my fellow citizens that outsourcing is the best thing we can do for our children?
- How do I take away the irrational fear of the “O” word? Looking at the math is not working.
Please help the children of Clark County!
P.S. If anyone wants to come to Las Vegas to talk to the Clark County School Board, I can arrange it!
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First we need to understand the difference between Outsourcing and Off-Shoring.
Outsourcing has been around for hundreds of years. Outsourcing is a way to be cost effective, while handing a process to an individual or group that either specializes in that process or can do the job more cost effectively. In many cases your local dentist or doctor will send lab work to another organization for analysis, this is usually a good form of outsourcing which helps spread the costs and the wealth.
Off-Shoring is the process that allows an organization to send the process not down the street, but to an entirely different country with completely different pay scale, human rights standards and political agendas.
Off-Shoring can save thousands of dollars in payroll and benefit costs over the course of the year. Much of what you hear is true. Here are some examples, the median US income is in the neighborhood of $60000.00 per year, that same position without benefits and safe working conditions can bring $4000 in china, $3900 in the Ukraine, $1250 in India, and $233 in Africa per year. This is the reason why many companies have decided to open new offices in other countries or simple offer business to foreign companies to supply those services, Call centers, IT services, accounting, manufacturing and even research and development projects. But the real fact of the matter is that off-shoring is slowly deteriorating the American way of life and destroying American government and infrastructure simultaneously. In fact off-shoring is another term for out-sourcing the American consumer.
Let’s review some facts.
Since around 1992, US companies have aggressively started off-shoring American jobs. The breakdown, although not really actually tracked by any agency of the government but has been tracked by some other organizations are estimated as follows: Approximately 200,000 US jobs have been off-shored each year since 1992 which accounts for 2-3 million jobs total depending on whose numbers you refer to.
If I could share this quote from a blog that I’ve recently bumped into could help.
“Don’t worry about problems of success before you’re successful. Business success boils down to three things. Acquisition, conversion and retention. Don’t worry about the last two if you haven’t figured out the first one.” -Liam Martin
I think it simply means you should cross the bridge when you get there. You should not think about those problems when you’re still not there yet. Instead, you should focus on the things you need to do in order for you to get there. You should face the problems on the present for you to get to the next stage. If you have a problem on your business and you think outsourcing is the only solution. You should try it and see where it would get you.