Effects of Outsourcing Companies Positions to Low Cost Countries Part 4

Security Risks in Outsourcing:

This declining rate of satisfaction will not be helped by recent reports on security breaches at the call centres in India. It was reported on the BBC by Zubair Ahmed that some employees of Indian call centre Emphasis in Pune transferred large sums of money to the fake account they created from the accounts of American customers of Citibank, whose call operations were handled by ousourcing company. This incident has brought into focus the lack of integrated security management system in India's call centres. The industry is still in the growing stage, and not much attention is paid to ensure that proper security procedures are followed. It is only after this incident that the companies have started doing background checks on the employees and have made the background checks a norm in their hiring process. This incident raises many questions regarding the safety and security of data when processes are outsourced; also the capacity of Indian companies to handle data securely is in question.

Social Effects of Outsourcing to Offshore Companies

While data security in outsourcing is being questioned, there is a question about the social effects of outsourcing too. This issue has largely being sidelined because the industry is mostly concerned with the more visible effects of outsourcing like the cost saving and profits, rather than look for the slow but steady social change outsourcing is causing. Kaushik Basu talks about this issue in his article, "The Politics of Business Outsourcing," published on Project Syndicate's website. In his article he says that job loss due to outsourcing may lead to protectionism and nativism. In the long run this can lead to racism and other discriminatory practices. So it is very important to help the laid off workers so that they do not develop these kind of feeling toward the country where his job went.

Leading this struggle is the International Federation of Technical and Professional Engineers (IFPTE), which is trying to convince the United States Congress to pass laws that, will protect jobs from being outsourced to offshore companies. The Union is also lobbying hard to get the working visa, especially H1B regulations tightened so that whatever jobs stay in America goes to Americans. Although it concerns us that the Unions are painting outsourcing as the sole reason for job losses in the IT industry, while they turn a blind eye to other reasons like stagnating industry, high costs and increasing competition from foreign-based companies. It would be better for IT companies and also for the IT professionals if they start looking at the whole picture instead of targeting outsourcing companies as the sole evil.