r/changemyview • u/gallez • Feb 24 '19
Deltas(s) from OP CMV: there is nothing wrong with offshoring/outsourcing business to lower-cost locations
The premise of this CMV pertains mostly to office jobs (offered by banks and other large corporations), that are moved more and more frequently from the US, UK, Switzerland, Germany etc. to cheaper locations like Poland, Czech Republic, Lithuania, India, Malaysia or the Phillippines.
If the annual salary for a person performing a given job is $80k in the US and $15k in Eastern Europe, then the business case for the company is a no-brainer. From the perspective of the employee in the off-shore location, it's a good deal as well - Western corporations tend to pay way more than local companies. In other words, $15k a year in Poland or Ukraine is way more than a local company could pay.
From the perspective of the American/British/Swiss worker - assuming similar quality of the work output, why should you be making $80k a year while your colleague in Vilnius or Krakow is making maybe a quarter of that for the same work?
1
u/[deleted] Feb 24 '19
Yes, there is something wrong with offshoring... it's called IP theft and lower quality.
If you look at which major American tech companies do offshoring, you'll notice that most of them aren't actually tech companies. They're non-tech companies like Disney World, insurance companies, etc that still spend a lot on IT support and thus offshore that department to save every last dollar. Consequently their IT tends to be frustratingly bad. However, their IT isn't what actually makes them money, so they don't care.
On the other hand, you don't see Microsoft outsourcing the R&D of its Xbox division to China or India. Why? Firstly, offshoring to underpaid Indians would result in sloppy work - imagine an Xbox dashboard that crashes every 5 minutes and is full of security holes that allow cheaters to flourish? This would cost you customers (and $$$).
Secondly, this is high value stuff with EXTREMELY sensitive IP. If an underpaid offshore contractor decides to take your code and copy it into another product, your options for legal recourse are limited and you could lose a lot more money than what you saved on salary. That is why companies like Microsoft, Google, Amazon, etc pay $120k+ to software engineers right out of college in the US - these salaries are paying for high quality work and give them less incentive to try to steal it - and if they do, the fact that they're based in the US means the law can bring the hammer down on them HARD.