Having recently returned from a two-week trip through The Hague, Budapest, London and Paris, I got a fresh dose of the European English-language business press, as well as the local news.
I was not surprised to see that outsourcing and offshoring continue to drive headlines, even in relatively low-cost markets such as Hungary.
From my HR chair, though, I am growing increasingly concerned about the frequently inaccurate use and abuse of these two terms – whether in Europe or North America. Since they burn brightly in front of our employees, we must be clear about what they mean.
Outsourcing is a fairly recent term for a very, very old concept. We look around our organisation, find things that we are doing that are either not core to our day-to-day or strategic goals, or can clearly be done faster, cheaper or better by someone else who focuses on just that thing.
I suspect outsourcing truly first appeared in prehistoric times. “OK, Grog, you’re quite skilled at gathering vegetables, so why don’t you focus on that while I chase down yonder mastodon?”
Outsourcing is the simple mechanism of understanding core competencies and effectiveness, and then being shod of everything else. That’s just good commercial judgement, isn’t it?
We can’t be certain about the true origin of offshoring but, at the least, it dates to the Middle Ages. In the late 1400s, Christopher Columbus had a prescient feeling that more could be made of what India had to offer, with its cheaper labour that developed cheaper products and materials. The conventional science of the day said he was flat wrong.
Columbus found a sympathetic ear back in Lisbon, Portugal, and the movement of processes to non-home locations began in earnest.
I am oversimplifying to make a point. HR has become a lightning rod for criticism here, and it needs to stop.
As a profession, we must do two things. We must clarify for our businesses and our employees the very significant differences between outsourcing and offshoring. We must also counter the rabid argument that these will result in the fall of civilisation.
HR is all about the effective acquisition, development and utilisation of people. If the noise surrounding our best efforts rises too high, we must stop and look at what causes the noise. In this instance, I fear that the noise arises from our failure to articulate what we are doing, and to ensure that it remains in perspective.
I advocate clarity and communication. What we, and our businesses, are doing in outsourcing and offshoring is not new, it is fundamental to capitalism. If our businesses are to thrive, HR must constantly look for, and drive to, new solutions that improve cost structures and operating efficiency.
As a profession, we have a key role to play in international commerce, but we must seize, and tightly manage, the unique opportunities we have today to lead.