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Looking for skilled, low-cost labor? Forget about India and China. How about Jonesboro, Ark.?
As the national unemployment rate hovers near 10%, some companies are starting to eye job-hungry areas of the country as prime candidates for the kind of outsourced work that once would have gone overseas.
Dubbed “ruralsourcing,” “rural outsourcing” and “onshoring,” the practice relies on two simple premises: Smaller towns need jobs, and they offer a cheaper cost of living than urban centers. So businesses that outsource work to these areas can expect to pay less — rates are often as much as 25% to 50% lower — than if they were hiring urbanites with comparable skills. More>>
Channels: arkansas, india, outsourcing
So long as US companies only think of outsourcing to biggies like Infosys, TCS, etc, and in turn these biggies only think of using the handful of places like Bangalore or Hyderabad, the costs of outsourcing will remain high and the concept of rural onshoring within America will take off.
However, I would like to caution that in the long term the competition may increase with more Indian companies seeking a piece of action. Further, they may perform work in smaller cities in India that also have personnel with excellent communication and technical skills, who can perform work at less than half of the prevailing wages in Bangalore or Hyderabad. This process will accelerate, given the deflationary trend in US that makes cost an important factor. So the phenomenon of rural onshoring may be a temporary one.
Comment by S. Jhalani — July 10, 2010 @ 5:46 PM