LeaseQ Projects A Lessening In The Offshoring Of Jobs

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A decade ago, the offshoring of jobs was on the rise. In the first half of this decade, the trend has begun to reverse.

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Their outlook has now reversed, however, with outsourcing largely viewed as “yesterday’s model”.

LeaseQ, one of the leading providers of business equipment leasing and financing options in the United States, is forecasting a decrease in the number of jobs outsourced overseas in the coming year, although the dropoff may not be enough to ease the unemployment woes the country now faces.

As government regulations and tax laws have become increasingly restrictive, more and more companies have chosen to do business in a friendlier environment, most of which are found in overseas markets and economies. General Electric set up one of the first offshore service centers in Delhi in 1998.

Their outlook has now reversed, however, with outsourcing largely viewed as “yesterday’s model”. GE has returned production of many of their products such as refrigerators, washing machines, and heaters from China back to Kentucky. Similarly, IT work has returned to a center in Michigan. This appears to be a part of a new trend, much the same way that sending jobs overseas was a little over a decade ago.

This reversal has also had political implications, with GOP Presidential nominee Mitt Romney never being able to fully recover from criticism early on about his early companies and their outsourcing practices.

According to LeaseQ, the economic crisis has had a significant impact on employment in America, and the threat of losing jobs overseas has put pressure on middle class wages. Offshoring has also had a detrimental effect on support for globalization.

Now the attraction of low wage countries is on the wane, with more and more American manufacturers, nearly two fifths of those surveyed, announcing plans to move production facilities from China back home. The pull for offshoring these days is to be closer to consumers in fast growing new markets, not to simply exploit low wages as a part of a production and manufacturing strategy.

There are additional reasons for this shift in corporate attitude as well. Manufacturing is becoming more automated, which means the allure of low wage workforces is becoming less of a factor. For those that still do rely on armies of workers, the cost of doing business has soared overseas, with wages in some areas increasing as much as 20%.

Based in Boston MA, LeaseQ is one of the leading providers of commercial equipment leasing and financing in the United States. They provide options for all types of companies, from Fortune 500 corporations to small business start ups.

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Vernon Tirey
LeaseQ.com
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Darrell Ritchie

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