Outsourcing To Unemployment?

As a business owner and an employer I am only too aware of the cost and impact on my bottom line that employing people can have.

Like many business owners, I have examined the option of outsourcing aspects of our services to people in the Philippines or India. Financially it would appear to make sense. Even my accountant recommended that I consider doing it, as it would have a dramatic impact on the profit my business could make.
Why not?
Most of my competitors were doing this, and appeared to be making great profits. Their ability to undercut my fees meant that I was no longer winning as much business as I had been.

It didn’t seem to matter to the people I talked to, that the quality of work being provided by these companies was not to the standards or time frames promised. In fact, a lot of business owners that I spoke to, did not seem particularly interested whether or not the work was being done here or overseas.

So why not have a go? Well I did, and found that by the time I had the work done to the standards I required, plus the cost of my time in getting the results I needed, resulted in a loss of profit for these projects.
I knew if I persevered, they might eventually get it right the first time.

Then it hit me. If we all keep outsourcing our work and get rid of our employees, what jobs would our ex- employees obtain?
But hey - why worry? My business would be making better profit. I would be better off financially.

It is a well reported fact, that small to medium businesses are the biggest employers in Australia.
If as business owners the only employee of the business was ourselves then who would be buying our services.
Think about it.
Unemployment is already climbing at a rapid rate.
No employment = less spending.
Greater unemployment = greater pressure on Governments to supply more social welfare benefits.

Who’s going to pay for that? 

Well the unemployed certainly aren’t. So the obvious answer is Governments will have to increase taxes. The profit that you were now making by not paying for employees is now being taken as tax, to support the increased demand for unemployment benefits and welfare.
With the reduction in spending in goods and services, the economy stalls. There will be a flow on effect regardless of what industry your business belongs to.

Don’t fool yourself. The increase in profits you may have made will be short lived. Even if you do make a killing in the short term and set yourself up financially, the obvious increase in taxes and increases in the cost of products and services will affect you. You won't escape it.

The cost of outsourcing essentially means we will outsource ourselves out of business.

The money you’re paying overseas workers is growing other countries, not ours. What do you think will happen to the price of goods and services when there is no longer any competition here?

Now many of us will immediately comment that employing people in Australia comes with a raft of issues. I was born and raised in WA and am a proud Australian, so I can make the comment that Australians have earned a reputation of not being the most dedicated workers, hence, many business owners look to hire immigrants as they tend to appreciate having a job and work hard.

Sorry people but it is a well-known fact, and many of us or those known to us have contributed to this.
(Of course we know there are many hard working Australians, I know of some who would dearly love to prove the statement above wrong if given the opportunity to work)
Fair Work Australia regulations, legislation and awards have ensured that Australian workers are some of the best paid in the world. As employers we not only have to pay our employees very good wages, but bear the burden of paying taxes, superannuation, insurances, training, and the list goes on and on and our bank balances wither.

Then there’s the issue of worrying about employees making claims of unfair dismissals or filing other litigious matters, resulting in many employers feeling as though they are walking around on egg shells and wondering why they bother.

So I can certainly understand why outsourcing appears attractive, but what do you do?
I think for me I would rather have a future and an economy that will see my business continue well after my retirement.
This means that my children and my friends and colleagues children will also have the opportunity of having jobs and running businesses of their own in the future.

As a business owner I think that if I can pay people to work for me in my office, then I am not only able to control the quality of the services my business supplies, but contribute to the financial development of my employees and their families, and to you as fellow business owners.

The money circulates between each of us, not from me to you to someone overseas. The people being employed overseas won’t be buying your services now or in the future, will they? But, my employees and I will be, but of course that’s if I’m still in business.

It’s time we stand up for Australia. This is not about employing white Australians, it’s about employing those who are Australians, people who live here and invest here and contribute to our business growth.
Perhaps it’s time to rethink our strategies.
Perhaps the answer is building better communities of businesses that invest in each other, instead of overseas.


*This is not a political statement nor am I criticising those who need to outsource, but created the document for interest and conversation.