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Outsourcing in the US and Why It’s Impossible to Prevent It

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Outsourcing has been used as a very cost-effective strategy by thousands of companies around the world for decades now and, as such, it is highly unlikely that it will lose its place as one of the most popular strategies for business improvement and growth. Instead of keeping many work processes in-house, many companies see the great opportunities of outsourcing them, as they can bring them quite a lot of benefits. They can hire experts to help streamline their business operations at a much lower cost than it would take to hire full-time employees to do the same kind of work.

More importantly, those employees may not provide the same quality of work that someone across the world could, which is also one of the main reasons why outsourcing is the first choice of numerous companies.

The US is among the biggest players in the world of outsourcing, and it has been one for decades. However, is outsourcing actually beneficial to the US or is it just plain harmful to the country’s economy?

How Is the US Economy Affected by Outsourcing

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More than 3 million US jobs are outsourced offshore, which really speaks volumes about the country’s economy. Think about it – all those jobs could be kept in-house, helping millions of American workers have a steady full-time job, thus helping the entire country have a much stronger domestic economy. Unemployment rates would greatly decrease and trade deficits would be much lower.


The US outsources jobs mostly in the departments of IT, research and development, human resources, and call centers. When it comes to IT, they mainly outsource to India and China, while they mostly outsource to India and the Philippines regarding call center services. Why is that? Because these countries have quite a large number of skilled professionals who speak English and who have either the same or higher quality skills that they offer at much lower wages than the professionals in the US.

Therefore, the US companies that outsource offshore save quite a lot of money, while offering high quality services to their customers. When you look at it from a distance, it seems like a win-win situation for everyone. However, when you take a closer look, you can see that the US economy is really suffering a great deal, because of the great “brain drain” and an increasing unemployment in the country.

Could US Outsourcing Be Stopped

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Of course US outsourcing could be stopped – all that the companies outsourcing offshore should do is stop making contracts with the workers outside the US and start hiring workers domestically. However, that would take quite a lot of time, because they would need to build a supply chain strong enough to keep the country’s economy on a high level. The outsourcing could be stopped, but should it actually be stopped?

At this point, it seems virtually impossible to do so, precisely because of the great number of outsourced jobs. The country would have to build its supply chain from scratch and it would bring the economy down before it could start flourishing.

Employment rates would certainly increase but, by hiring US workers who are much more expensive than the foreign ones, the US companies would need to raise their prices, so their customers would need to pay higher costs for something they could get overseas at much lower costs.

Therefore, US companies would definitely lose their competitive edge. In order to prevent that, many companies would certainly entirely move overseas, while perhaps a greater number of them would go out of business. Needless to say, the US economy would suffer much greater consequences by stopping outsourcing altogether.

At this point, outsourcing simply seems like a much better choice for every company in the US and they should definitely not try and prevent it. Just like there are significant benefits of outsourcing for small businesses, there are many valuable benefits for the big guns and the entire country as well, which is exactly why outsourcing is a strategy that numerous companies will certainly continue to take advantage of, not only in the US, but also in the entire world.

About the author

Manmohan Yadav

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