Regulatory Effects and Strategic Global Staffing Profiles: Beyond Cost Concerns in Evaluating Offshore Location Attractiveness |
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Authors: | Stan Malos |
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Institution: | (1) Organization and Management Department, College of Business, San Jose State University, San Jose, CA 95192-0070, USA |
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Abstract: | The practice of offshoring—staffing all or part of a business outside the home country—has proliferated to such an extent
that the question for most multinational corporations (MNCs) is where, not if, some or all of its labor forces should be located
beyond geopolitical borders. It remains an open question, however, where and under what conditions the hoped-for advantages
of offshore staffing are best realized. While cost savings continue to play the major role for most companies, both quality
and availability of worker skills and administrative and regulatory contexts of labor markets have increasingly influenced
global staffing decision processes. This paper has two purposes: to examine the extent to which employment laws and other
regulatory factors can impact—beyond cost concerns alone—the decision where to offshore, and to offer a methodology for developing
attractiveness profiles that can help governments, service providers, and MNCs evaluate and improve the match between staffing
needs and labor market characteristics. By examining financial considerations in conjunction with administrative and regulatory
effects, the parties can better manage ongoing expansion of offshore staffing arrangements beyond more established locations
such as India, China, and Malaysia. Strategic implications of a trend toward nearshoring—relocating offshore operations closer
to or within the home country—are also discussed. |
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