Cut Costs by as much as 30 to 70 Percent
So blares the McKinsey article titled “Getting More Out of Offshoring the Finance Function”, dated Nov. 21, 2014. The whole tone of the article seems rather breathless. Of course, I’m biased since I have been adversely affected by this trend. The economics of it is compelling: it is hard to compete against $5/hour wage. No one in the US can.
But there are other considerations besides raw bottom line:
1. with more and more jobs being offshored or automated, you have fewer and fewer customers in the US;
2. kids know that finance is being offshored or automated so in the coming years, less and less will major in finance or accounting because companies have said that there is no future for US folks in that field (kind of like what happened in manufacturing);
3. wages in India will rise and when they reach an uncomfortable level, you will be looking to the US for some homegrown talent…oops, there are none because kids have found greener fields, and so you will belly ache that you can’t find skilled people (hey, doesn’t that sound like what the current manufacturers are complaining?);
4. now your pipeline of US finance leaders diminishes because you can’t feed it with talent – they’ve gone elsewhere;
5. with fewer customers, you will begin fighting with lower and lower price, and as Seth Godin says, it’s nasty and brutish at the bottom of the price chain – no one will be a winner.
I’m sure I’m not the only one thinking this, so don’t complain when your company can’t find customers or talent. You are part of the problem when you apply short-term solutions for short-term profits.
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