Ethics of Outsourcing

The recent months have seen a whole new debate in the U.S. and Europe about the ethical dilemma in offshore outsourcing. Critics are concerned about the widespread loss of jobs in their countries as more and more processes move to low cost countries like India, Philippines and Brazil. Faced with a choice of retaining long term employees at a higher cost to company and outsourcing the same task to cheaper locations where they can be done just as well, what does a company choose?

The primary consideration of corporate leadership is to keep their company competitive. Offshore outsourcing helps companies to make substantial savings on costs, improve profitability and add value to shareholders. Not surprisingly then, most global corporations have adopted outsourcing in a big way. The few that have held out are joining the bandwagon as they find it increasingly difficult to stay competitive without outsourcing.

The Offshore Outsourcing Ethical Dilemma

Companies face a lot of outsourcing issues while trying to send out jobs to cheaper locations. Many of them have to do with employee resentment towards outsourcing while other concerns revolve around ethics of outsourcing practices at the vendor location. Some of the concerns about the ethics of outsourcing practices at the offshore location include:

Poor Work Environment at Vendor Location: Concerns about poor work environment and exploitative HR policies in Indian BPOs (Business Process Outsourcing) may have been the reason why the earliest outsourcing vendors were described as ‘sweat shops’. However, these concerns are all but gone now as more and more customers visit vendor locations in India and see the reality of comfortable and state-of-the-art work centers in India.

Fall in Service Quality: Most companies that decide to outsource have to appease widespread concern of employees and shareholders about drops in quality. Can services delivered from half-way across the globe by a set of people who are culturally removed from the parent company meet quality expectations?

Environmental Issues: With rising environmental consciousness in U.S. and UK outsourcing companies are concerned that vendor companies may practice environmentally damaging processes.

Cultural Differences: The cultural differences between the two countries is often cause for worry in any outsourcing venture. Companies in the U.S. are greatly concerned that they may have to deal with governmental issues, bribes and language barriers in the country where they wish to outsource.

Ethical Outsourcing: Measures for Companies considering Outsourcing
Companies deciding to outsource can take the following steps to ensure that they manage the tightrope walk between ethics and outsourcing.

Proactive Employee Management: Companies that decide to cutback or outsource jobs need to take several proactive measures to make the transition as easy as possible for affected employees:

• Be open and communicative about the decision to outsource
• Plan the outsourcing strategy well in advance
• Give affected employees early notice so that they have enough time to find replacement work
• Provide a "safety net" for employees who are losing jobs
• Work out severance packages
• Devise opportunities for retraining and transfer of employees into alternative roles
• Alternative recruitment and placement assistance

Detailed Vendor Research: Companies wanting to outsource should make a thorough inquiry into the track record of the vendor, network and infrastructure security systems in place, security awareness of employees, safety of electronic data storage, NDA and SLA formats in use etc. they must also make a detailed investigation of the vendor’s past projects, technical competencies and outsourcing ethics.

Audit Vendor Operations: Outsourcers should impose stringent standards on the offshore vendors and conduct intermittent audits on the work conditions, HR policies and environmental practices of the vendor company.

Ethics of Outsourcing Practices at O2I

Outsource2india is a leading player in the outsourcing industry with customers from across 22 countries. At O2I, we are completely attuned to our customers’ concerns about ethics in outsourcing. For this reason we have put in place, a variety of measures at our Development Center located at Bangalore which make our commitment to ethics in outsourcing amply clear.
These include:

Data privacy and Confidentiality Measures at O2I: We have invested in firewall protected networks, encrypted servers, VPN (Virtual Private Network) and password protected systems that ensure complete confidentiality of customer information. Our work spaces are further protected by the use of swipe cards and cutting edge security devices. These have helped us gain customer confidence in key areas such as outsourcing of healthcare processes and financial services.

Clear Communication: even as talks progress to finalize the outsourcing relationship, O2I establishes clear lines of communication with the customer. O2I lays down unambiguous definitions and schedules on transition, pricing, outsourcing partnership, privacy policies and outsourcing ethics.

Legal Measures: All legal aspects of the outsourcing relationship are covered in detailed Service Level Agreements (SLAs) with customers. We enter into meticulous Non Disclosure Agreements with employees and third party service providers tax preparation protect customer interests.

Employee Selection Measures: At O2I we believe that a company’s reputation is only as good as the people they hire. We conduct thorough background checks on our employees and follow tough selection processes to ensure that honest and responsible individuals committed to ethics in outsourcing form part of our team.

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