The Impact of Strategic International Job Placement Term Paper

The Impact of Strategic International Job Placement - Term Paper Example The companies hired for these functions are well equipped with trained personnel and tolls to perform the jobs more efficiently and cost effectively. Typically, an outsourcing process includes four different stages. The first stage includes the strategic thought processing for building up the philosophy for outsourcing activities. The second stage involves the evaluation of the outsourcing projects and selecting the suitable one. The third stage deals with the development of the contract and the determination of the price of SLA (service level agreement). Finally, the fourth stage deals with the relationship management between the client and the service provider. Business Process Outsourcing and Information Technology Outsourcing are the most common forms of outsourcing. The task of outsourcing becomes more delicate when the work is offshored i.e. the work is done in a different country. This brings in certain differences of culture and time zone. In USA, business processes are outsourced at a huge rate. Since 1980s the outsourcing by US started gaining momentum. The range of outsourcing is also wide since USA outsources material inputs outside the firm and also hires services from beyond the borders through FDI in foreign countries. The process of outsourcing thus has multifaceted implication on USA. It has influenced USA's trade, labor market, welfare, growth and industrial structure. Out of all the impacts of outsourcing, the impact on the US labor market happens to be the most sought after issue. Effect of Outsourcing on GDPThe prime reason for outsourcing in US is the cost and time savings. These benefits of outsourcing offer immense growth potential for the US firms. The outsourcing of functions in USA has had a significant effect on the country's GDP. It is estimated that outsourcing added $33.6 billion to the real GDP of USA in 2003. The analysis in 2003 estimated that by 2008 outsourcing will add $ 124.2 billion to the real GDP of USA. The trade effects of outsourcing were seen to be positive. In 2003, US exports were higher by $2.3 billion because of outsourcing and the estimated value of exports from outsourcing in 2008 was $9 billion. Extensive research on outsourcing revealed some magical figures on savings. It was seen that the IT industry in USA will save up to $ 390 billion through software development and offshore services. The GDP of USA also grew considerably through massive rounds of outsourcing. Between 1999 and 2002 USA experienced an additional growth of $2 30 billion in their GDP. Some of the remarkable figures in US export and import indicate that the significant improvement is due to outsourcing. In 2004, the export figure on services was $343.9 billion in services while the import was $296.1 billion. US trade in services increased by 33 % from $482.3 billion (1999) to $640 billion (2004), with exports rising by 22 percent and imports increasing by 48 percent (Greene W. January 2006). Outsourcing of Manufacturing and IT jobs The benefit of IT outsourcing is enhanced productivity. II capital prices are significantly low and tend to fall. Hence, a company which is focusing on the outsourcing IT will have two options open before it; purchase IT capital