Platt Perspective on Business and Technology

Social networking and job search 33 – outsourcing and its impact on job search and on hiring, and as entrepreneurialism

Posted in job search and career development, outsourcing and globalization by Timothy Platt on January 14, 2010

This, in a real sense is a continuation of a posting I added to this blog and this series last month: Social networking and job search 26 – working in-house, working as a consultant and your constraints box. I wrote that posting with an intention of provoking thought, and even disagreement and some of the response I have received has shown that to have worked. I will add that with our current job market and unemployment rates that reaction included some very genuinely expressed anger. A lot of people question both the wisdom and integrity of businesses that take on consultants and other outsiders to fulfill job responsibilities within the organization, seeing that as a denial to hire qualified local candidates. Doing the same or more with less sounds great until you or a member of your family is unemployed and unable to find a new position. The perception that companies refuse to hire just to save money on benefits and other indirect costs – at the knowing expense of good people in their own local communities is out there and it is being expressed.

My intent in this earlier posting was to provoke people looking for work to consider taking consulting positions, and I have also written on temp work and a variety of other options in this series, for widening the constraints box and options for finding employment.

My intent here is also one of provoking thought as to what our constraints to our search are, so we look as widely as possible and so we find as many options and opportunities as possible. And here I want to delve a bit into outsourcing.

When people hear of outsourcing they almost always automatically think of and limit their thoughts to companies in places like Mumbai, India that take on call center operations, computer programming and IT support and a growing range of other functionalities out of the hands of local employees. According to this perspective, employee salary and benefits are so low there with the local standard of living that these companies can undercut any possible benefits to hiring full time employees, or even to hiring local consultants.

There is an element of truth to this, and certainly for some businesses and industries, and for some functional areas and task sets but this is not the whole story or even a particularly accurate one in general. That is because a lot of companies that have tried outsourcing have left that option as one that does not work for them:

• With their outsourcing done 11 time zones away so it is difficult at best to call and talk with someone if there is a problem.
• With dialect and culture differences that can lead to real problems for customer facing services like call centers.
• With disconnects on needs and priorities for software development and not just for front-end user interface development.
• With a range of potential problems that can include marketing and company image and public perception.

Outsourcing can work but it does not always work, or automatically work well when it works at all. Bottom line, it is not always good for the top or bottom lines.

• One response to this is the development of more effective and creative alternatives to outsourcing per se.
• This can mean creative hiring models and it can mean bringing in local consultants, though I add they are often more of a solution for one-off project based work than for carrying out ongoing operational tasks.
• This has also created opportunity for more local outsourcing solutions, and particularly for carrying out functions that fall way outside of the organization’s core competencies but where specific tasks have to be done anyway.

I wrote of temping and temp to perm and I have written of consulting. Two more out of the usual box options come into this discussion here:

• Working with a local outsourcing firm, where this means working as an employee consultant for a business that follows an outsourcing model.
• Setting up your own outsourcing firm as an entrepreneur.

Please tale a look at my Startups and Early Stage Businesses series and read further on this if you want to consider the later of these two options, and reach out to anyone you know who has started a business for advice too. For here and now I will suggest a list of factors and conditions you would want to meet for this to make sense. You want to have a set of skills and experience that can help you be the answer to a problem of a very specific type for potential client businesses.

• This has to include ability to address one or more related problems that commonly come up for your target industry.
• They should be quite different in their focus and orientation and in their necessary skill sets from anything standard to directly fulfilling business goals for that industry. So for example, in automotive retail they do need to have call center skills and people in-house for managing their sales flow, repair shop appointments, etc but they do not generally need to have web development skills or web site management skills on hand and in-house or a variety of other IT-based functionalities. They still, however, need effective web sites and other resources – web-based third party sales leads for example.
• You need to know and be able to work within their price point and their expense restraints for the services you would offer. You have to be able to make a profit on the one hand but not price yourself out the market on the other.
• You need to be able to market, finding and connecting to potential clients and converting them to paying customers.

This posting is about becoming an entrepreneur as an alternative to taking either an in-house position or a more standard external employee, consulting approach. The key to making this work is in really knowing the target market you would work with and preferably as an acknowledged insider who can help solve problems cost-effectively.

This posting is about keeping your eyes open to new and different options and opportunities where the ones you would more automatically gravitate to do not seem to be working. If you cannot get a job build one.

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