Outsourcing to India: What are the Ethical Implications?

If you have recently found yourself calling a customer service support line for any number of products or services, you may have noticed a distinct geographic shift amongst representatives working in call centers.  This of course refers to the current corporate trend of outsourcing to India.  And while most consumers only see it when they dial in with questions or concerns, it is a development that has invaded many levels of business in America, although the main focus seems to be on lower level positions like customer service and technology services (such as tech support, quality assurance, computer programming, and engineering).  The reason for this marked mass exodus to the east centers on money.  As always, corporations are looking for ways to pad the bottom line and the fact that they can hire five employees in India for the same cost as one in North America has no doubt heavily influenced the recent move to outsource American jobs.

The ethical issues involved in this move are multiple.  For starters, there’s the recession.  While the government claims to be doing everything in its power to help reclaim jobs lost to layoffs and combat the unemployment rates that have skyrocketed in the last couple of years, they have done nothing to stop companies from leveling their customer service departments stateside in order to operate at a fifth of the cost in India.  While this spells a higher profit margin for ailing industries (which one hopes will fuel the economy, and thereby the job market), it has currently done very little for professionals who find themselves out of work.  This has caused many Americans to question the commitment of our government to upholding their promises of job generation in order to pull us out of the recession.

And then there are the corporations themselves.  Certainly many businesses are struggling to simply stay afloat long enough to enact a turnaround.  But perhaps shipping American jobs overseas is the wrong solution.  While it may buy them some time in the short-term, consumers have a long memory and branding plays a significant role in purchasing choices.  Companies that can boast a “made in America” work ethic can leverage that fact to improve their image, retain loyal customers, and increase sales.  Of course, offering lower prices than the competition may play a role, but in the long run, many patriots are willing to pay a little more for locally made and supported products.  So companies that outsource American jobs may be shooting themselves in the foot in the long run.

But there is always another side to the coin.  One must ponder the implications for Indian workers, as well.  It’s not as if these people are being exploited, despite the fact that Americans make five times as much money for the same job.  In fact, employees who work in call centers (who are considered to be the lowest on the totem pole in America) are highly respected and well-paid individuals in India, hardly the picture of third-world exploitation that we imagine.  The real concern is what might happen when our economy finally turns around.  Will U.S. companies attempt to garner goodwill amongst American consumers by returning those jobs to the states, leaving trained Indian workers with no jobs and no prospects?  Or will they continue to outsource to the point that they are paying just as much in India as they are at home?  Either way, it seems that by making the move overseas, many companies may simply be staving off an inevitable outcome while contributing to job loss in America and raising the ire of the consumer public.

Leon Harris writes for a Canadian personal finance blog with an emphasis on careers, real estate, politics, and banking.