Not all
oursourcing services goes to cheaper countries. Some outsourcing went to
developed countries like Australia, New Zealand and now UK is also in the
picture. I was told by someone who was fuming mad that he lost a bid for a very
big job to an Australian agency. But this was not his sore point. The pain came
when the Australian company contacted him to be the subcontractor as the
Australian companies did not have the expertise or his expertise was cheaper.
What it meant was that the Australian agency ended up as the main contractor
and getting the first and biggest cut of the pie. He ended up doing the donkey
work as the subcontractor with a few pieces of crumbs. Singapore job given to foreign companies to
make the money and Singaporeans still ended up doing the job for less!
This kind of
outsourcing is not exploiting the cheap labour of foreigners but on
Singaporeans. And the foreigners get the most profit.
There is now
a hybrid model of outsourcing. This is outsourcing to a 3rd world
country, presumingly cheaper, only for the 3rd world agent to hire cheaper
locals to do the job here. This model just surfaced in the LTA officer beating
up a Uber taxi driver case. LTA outsourced its parking and traffic control
services to a foreign company called Ramky Cleantech Services. I found this out
from a post in TRE. And this foreign company then hired Singaporeans and locals
to do the jobs here. I am not sure if the fighter LTA officer now arrested is a
local or a Singaporean.
Anyway, this
is the new model of outsourcing services. What is the advantage of such a
costing saving arrangement? If the foreign company is hiring locals or
Singaporeans and pay them cheaply, how cheap could they pay them and how much
would be the savings? From this beating incident, the LTA officer must not be
paid much as he was not interested in his job. I think the most savings must
come from top management staff. If this company is operating in a 3rd
world country, and their management staff are located in the 3rd
world country, they can’t be expected to be paid in the millions like in Sin
City. There must be a lot of savings from not paying their management staff in
S$ and in the millions. I think this makes sense.
I am not
sure how many different models of outsourcing could there be. I know one model
would not happen. This model would be setting up a Singaporean company
overseas, hired Singaporeans in top management and pay them millions to hire
workers in 3rd world countries. The savings cannot be much even if
the rental is cheaper. The Singaporeans would demand for more for hardship pay,
living in a 3rd world country and suffering the inconvenience of
living.
What do you
think?