This article focuses on the risk factor associated with Business Process Outsourcing (BPO) services in developing countries. This risk arises due to the psychological and other factors associated with employees. This model is suggested to MNCs to minimize risk when outsourcing business to companies in developing countries. From a social point of view, the unemployment rate in America is increasing and the Americans are protesting outsourcing.
It's a recession when your neighbor loses his job. It's a depression when you lose yours.
As the US faces its worst downturn in 50 years, the words of the former president never seemed more true to the Americans. Due to the downturn, there's a grave risk that outsourcing could be seen as the chief cause of a depressed job market. Consider this: The 6% unemployment rate in the US today is at its highest in the last four years. Worse still is that many of those who are unemployed are well-educated and white-collar workers. The US labor union membership fell from 280,000 million to 16.1 million in 2002, and 448,000 Americans filed claims for unemployment benefits. This sentiment has only been fueled by reports similar to Forrester Research, which estimates that 3.3 million of the 6 million BPO jobs in the US will be sourced offshore by the next decade. That is, $136 bn in wages will move from the US to nations like India and Russia (Singh, 2003).
Business Process Outsourcing (BPO) is the act of giving a third party the responsibility of running what would otherwise be an internal system or service. For instance, an insurance company might outsource their claims processing program or a bank might outsource their loan processing system. |
