Why offshoring should be your last resort

The sluggish economic recovery and pressure to increase earnings continues to influence the leadership of banks and insurance companies to focus on driving down costs. The temptation, of course, is to offshore jobs – a strategy which promises a quick fix by reducing labor costs but one that also has serious ramifications. Cultural differences, customer complaints, damage to the local economy, and the complexity of long distance management are just some of the problems organizations encounter when offshoring. A plethora of recent press and research estimates that almost half of all offshoring projects fail outright or fail to meet expectations, raising the question of why any company would even consider offshoring when they have not yet exhausted their options at home. By introducing a continuous improvement system, organizations can still drastically cut costs right here at home without unnecessarily damaging the local economy, employee morale and customer loyalty.

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