The BPO industry and Its Effects on the US Economy

Is the BPO industry taking jobs away from America?

Many companies have turned to BPOs to take advantage of its benefits.  As a result, Americans fear that this trend will have ill effects to the economy as they believe that it will only augment the already high unemployment rate in the country.  However, businesses cannot ignore the fact that the cost of 1 local employee can get them 3 outsourced employees with the same qualifications.  With these kinds of odds, it will take more than principle to prevent these companies from taking their operations elsewhere.  And thus, outsourcing vs in-house has begun.

The concern for the increasing unemployment rate reached the halls of congress where they came up with the “Bring Jobs Home Act” in the hopes of ending the BPO frenzy by giving better deals to corporations like a 20% tax credit of the cost of bringing jobs back in US soil.  It was believed to be the best way of alleviating the economical crisis and ultimately keep the country on its feet.

But, is it really the case? Is the BPO industry really taking jobs from the American people or is it just about politicians garnering the public’s attention in the hopes of winning the elections.  In any case, should BPOs and their clients be worried about the impending doom of business outsourcing? Well…if you think about it, there were similar efforts in 2004 to bring the jobs back home.  Congress tried to pass a similar bill and many politicians, or those who aspire to be one, used it as a means to gain the public’s sympathy.  However, the fact remains that most companies need to outsource their operations to stay afloat regardless of the county’s economic crisis.  The corporations’ sentiment was simple; if they were not allowed to take their operations abroad, they will eventually lose the business altogether and sink…bad for the economy…worse for politics.  It is a politician’s worst nightmare.

So, is the BPO industry taking away jobs? No, in fact, it creates new ones.  People need to see the big picture to understand what outsourcing really provides.  Not everything can be outsourced.  Products and services obviously need to be within the country to be cost effective.  As the business grows, there will be a huge demand for its products/services which can overwhelm their current system.  Thus upgrading is the only option and in turn, the need to hire more people.  So you see, BPOs may take away some jobs but it also gives companies the means of creating new and better ones at home.