A local entrepreneur says that the impending radical shift in employment practices in Australia will potentially eliminate hundreds-of-thousands of jobs and change the way we do business.
Scott Linden Jones says a number of factors have converged to make offshoring an increasingly popular method of employment.
However, he suggests it needs to be understood rather than feared, and as part of recognising this change has established a consultancy called Easy Offshore to help businesses through the process.
“The convergence of technology, education, wage costs and free market economics has created a situation where Australia’s current employment regime is unsustainable, and change is already upon us,” Mr Jones says.
“The force of this change can already be seen flooding into our employment structures, removing thousands of positions as companies are forced to look offshore for cheaper alternatives to run their businesses.
“Instead of swimming against the tide, we need to understand these changes. Businesses need to prepare for the future, and parents and careers guidance staff need to help students consider the impending impacts to professions.”
Offshoring, as opposed to foreign outsourcing, allows local businesses to hire staff overseas the same as they would in Australia, maintaining control over systems, processes and quality of results.
The practice has increased dramatically in recent years, with modeling commissioned by several unions, including the Financial Service Union, showing at least 250,000 jobs across Australia's service sector are likely to be offshored in the next few years in just three industry sectors alone.
Mr Jones says there is reason to believe that the scope for offshore labour changes will exceed one million jobs across the whole economy.
“There is no turning back what has already happened, so as a nation we need to meet the challenges head-on as we cannot afford to ignore the effects of micro-globalism,” Mr Jones says.
“Within the next ten years each of us will witness the largest shift in employment, labour locations, and skills distribution that this planet has ever seen, and professions which are now the cornerstone of our employment structure will become redundant.
“If businesses don’t embrace this paradigm shift, they’ll fall victim to it as their competitors become more cost efficient and reduce prices accordingly.
“You don’t have to be a major bank or telco to engage in offshoring these days. Smaller businesses are now hiring offshore teams too, but some of them fall into traps that experience can avoid.
“With the methods I utilise any sized business can complement their Australian team with an offshore team.”
Easy Offshore assists businesses through the process of setting up an offshore team. This includes analysing what positions to hire, how much to pay, what locations to use, how to recruit successfully, how to comply with local HR laws and how to manage remote staff effectively.
“These are all complex challenges for any business changing to a global labour-sourcing model,” Mr Jones says.
“The advantage is the lower cost of living in countries like the Philippines allow for a lower wage base while simultaneously increasing the standard of living for your offshore workers.
“This is where offshoring comes into its own as a business solution, and provides results that can be done without any difference in quality.”
Mr Jones says some of the misconceptions he’s encountered about offshoring are often tied to out-of-date sweatshop practices.
“Offshoring is often associated with manufacturing and telemarketing, which has been the focus of poor working conditions in the past, but that image is out-dated,” Mr Jones says.
“As an ethical business owner, you also want to be 100 percent certain that the wages, working conditions, and satisfaction of your offshore team are all of the highest.”
Mr Jones says that although there is potential for significant Australian job losses from offshoring, most small and medium enterprises engaging in the practice are actually growing their Australian teams as well.
“Many of the early adopters of offshoring are gaining substantial marketplace advantages by rolling their increased margins back into growth,” Mr Jones says.
“This often means they gain market share and grow their Australian team as well as their offshore team, however the slow adopters will be squeezed out and may fail because they cannot compete.”
Mr Jones says some industries and professions are less likely to be impacted as offshoring gathers pace.
“Clearly trades work cannot be done down a phone or internet line, so these types of jobs will continue to be in demand locally,” Mr Jones says.
“Doctors, nurses, engineers in hands-on roles, face-to-face sales people, teachers and personal services; all types of positions where someone is required to be physically present will stay in Australia.
“For these roles, the cost of the labour is far less important than the skill set.”
For more information visit www.easyoffshore.com.au