Outsourcing, Immigration and Intercultural Communication
Globalization has substantially promoted immigration and emigration across the world. This has led to the growth of international trade relations and cross-cultural communication as more and more American companies turn to offshoring and outsourcing in a bid to cut costs and find the best talent. However, American companies that outsource their services overseas or hire immigrants likely face intercultural communication challenges. Fortunately, such companies can get the most out of their foreign workers by communicating with them effectively.
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US Immigration Statistics
As of December 2014, the US labor force had absorbed 25.7 million foreigners. Some of these are highly skilled individuals that have enabled employers to plug gaping talent shortages. Nevertheless, Silicon Valley’s tech community has been lobbying the government to ease bureaucratic red tape that has made it difficult to hire skilled foreigners. In particular, they want the H-1B visa restrictions, such as the annual cap, which is currently set at 65,000, eased. Although 20,000 more H1-B visas are accessible by foreigners who earn Master’s degree or higher education credentials from American colleges/universities, that number is still too low to address the huge talent shortages being experienced across the nation. What’s more, the Obama administration has not budged from its immigration status quo, meaning the Trump administration will have to deal with the talent shortage issue at some point. Tech industry insiders say importing STEM talent is the only way the US can maintain a technological advantage over ambitious countries like China.
It is worth noting that, out of the 35.7 million immigrants living in the US aged 25 years and older, 28% have attained at least a bachelor’s degree. On average, European immigrants have the best academic qualifications, even in comparison to American adults. Additionally, newly arrived immigrants are more likely to have attained advanced degrees (18%) compared to people born in the US (11%). It is also worth noting that US-born adults with college education credentials are 4 to 5 times more likely to emigrate than their peers who have never attended college.
In recent years, outsourcing has become the norm as nonprofits, established corporations and startups look for ways to reduce their operating costs. According to a survey carried out by Deloitte in 2014, India has established itself as a top outsourcing destination, particularly in the provision of IT services such as location sourcing strategy. For this reason, the IT sector in India has grown into a mature sector that provides mission-critical services to some of the most prominent global brands.
Another major player in this space is China, which accounted for 30.2% of the global outsourcing industry at the end of 2014. The Chinese outsourcing industry supports clients spread across 200 countries globally making the Asian economic powerhouse the clear market leader. Outsourcing hotspots abroad have a bright future as 50% of participants in the aforementioned Deloitte survey reckon that the rising usage of big data, enterprise mobility tools, and virtualization will necessitate outsourcing. This is largely because it is more expensive for businesses to rely on in-house hardware/software solutions than using web-based platforms offering similar services.
Business Process Outsourcing
Business process outsourcing (BPO) is by far the largest outsourced service. Currently, the global BPO sector generates revenues of $76.1 billion every year. In comparison, the IT market generates $28.5 billion in revenues annually. BPO’s popularity is hinged on the ease of farming out content/data-facing tasks to freelancers spread across the world. Doing so translates to huge savings since these freelancers are cheaper to hire and easier to fire. Some of the most common BPO tasks include developing and writing blog content, managing social media communications, data entry, accounting, graphic design, web development, survey monitoring, and data collection. Some of these freelancers are highly skilled in their respective disciplines and are regularly recruited by American startups facing talent shortages or financial constraints. Examples of Silicon Valley startups that have used outsourcing include Zendesk, AirBnB, and Artsy.
Handling Cross-cultural Communication Effectively
Intercultural communication can be tricky when communicators do not share a common background. For this reason, decision makers must figure out the most effective communication channels and strategies. This is in addition to accumulating as much knowledge as possible on different cultures, religions, acceptable/unacceptable norms, and transactional standards. It is also advisable to develop a standard communication strategy that is applicable organization-wide to prevent communication conflicts. It is important to note culture covers both societal and corporate values. Brands that fail to adopt a multicultural marketing approach are likely to experience revenue stagnation or decline because they may not be communicating and addressing each consumer segment effectively.
One way of enhancing intercultural communication is by improving ethnic and racial diversity at the workplace. American companies that have adopted this approach have seen their earnings before interest and taxes (EBIT) grow by 0.8% for every 10% increase in ethnic and racial diversity at C-suite levels. For publicly listed companies, this translates to better financial performance as well as higher investor and consumer confidence in their products and services.
How to Improve Inclusivity in the Workplace
Businesses should strive to provide an inclusive working environment that is religion, race, political affiliation, gender, and disability agnostic. At the same time, they should comply with regulations governing the same aspects. On its part, the HR department should ensure that diversity policies are fulfilled since it plays a key role in the recruitment and hiring process. Talent training and management should be diversity-friendly as well. For organizations with a large staff footprint, it is sensible to compartmentalize diversity initiatives. Workplace diversity has one key benefit; it improves B2C interactions since racial, cultural, and gender inclusivity boosts innovation, collaboration, productivity, and cohesion enhance staff-consumer interactions.
American businesses are increasingly embracing outsourcing and offshoring. The top outsourcing destinations include India, China, as well as millions of freelancers with diverse skill sets. Nevertheless, the ensuing intercultural interactions often face serious communication challenges that are yet to be addressed effectively. The best way to resolve this problem is by improving racial, religious, and gender diversity in the workplace.