Outsourced to overseas operators to hire Singaporeans

Outsourcing of services to cheaper 3^rd world countries for less important services have been going on for several decades and the business of outsourcing is still doing well as the business competitiveness keeps going lower and lower down the value chain, from a cheap country to another cheaper country. To the business that outsourced its services, it is all about keeping cost down. Nothing else matter especially in the banking and IT industries where sensitive data and critical operations can be compromised, sabotaged or important data stolen. No, these are not important as long as there is cost savings.

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 3^rd world country, presumingly cheaper, only for the 3^rd 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 3^rd world country, and their management staff are located in the 3^rd 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 3^rd 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 3^rd world country and suffering the inconvenience of living.

What do you think?