Why Companies Are Looking at Onshoring Jobs

After years of sending jobs to other countries, companies are reconsidering their policies. Outsourcing is no longer in vogue at many major corporations. Instead, they are reverting back to hiring Americans for jobs. What has changed? Companies are accepting that some of their opinions on outsourcing were wrong. Here’s why companies are looking at onshoring jobs.

Outsourcing Has Flaws

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When corporations started shipping jobs overseas, they had a single goal for their choice. They wanted to save money. Thanks to the power of the American dollar against foreign currencies, companies could hire international personnel for a fraction of the cost. The median worldwide income is approximately $10,000. That’s barely 20 percent of the average American income of $51,939. Workers abroad are much cheaper to hire, and corporations can roll that savings into boosting their net revenue.

Unfortunately, outsourcing does more harm than good in many instances. Cultural issues can reduce the quality of infrastructure. Communication is a constant risk, since the people performing the requisite work are thousands of miles away from the base of operations. For that same reason, shipping and other logistics can be a nightmare as well as exorbitantly expensive. Finally, free trade agreements place an onus on American businesses forced to compete on the global market. Outsourcing looks better on paper than it works in execution.

Big Data Reveals Onshoring Is Better

Why are companies paying more for Americans to hold down the jobs that were outsourced until recently? The explanation is that businesses are relying more on big data. When statistics reveal imbalances that impinge on the bottom line, savvy employees discard conventional business tactics. Numbers don’t lie, and the results on outsourcing are emphatic.

Onshoring Satisfies More Customers

The primary use of customer service, the most popular outsourcing job, is to solve consumer problems. Most are basic problems, such as lost account information or bill payment options. As phone technology has advanced in recent years, automated systems handle most of these issues.

When a customer asks to speak with a live agent, he or she usually has a complex issue. Communication is integral to such situations. Available data indicate that outsourcing is harmful in such instances. It’s often an unfortunate byproduct of heavy accents that are difficult for Americans to decipher. Studies show that outsourced employees resolve complex issues only 45 percent of the time.

Onshored customer service is more popular, since workers speaking the same language as customers solve the same problems 88 percent of the time. That’s roughly double, which means people working with outsourced representatives must make twice as many calls to resolve their problem. Companies pay for all those excess phone calls, negating the potential savings of cheaper salaries.

Through onshoring, corporations guarantee that they have more satisfied consumers. Plus, they may have an easier time enticing potential workers who wonder whether customer service is the right career. Available data indicate that it provides a satisfying job experience, since customer-service representatives are able to successfully help customers in approximately nine out of 10 phone calls.

Outsourcing is out, and onshoring is in. The explanation is simple. Big data suggests that the idea of saving money by hiring overseas employees is a fallacy. Instead, companies satisfy more customers while claiming more satisfied employees when they implement onshoring.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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