About two months ago we were in the process of switching renters for our downstairs studio apartment. We asked the next renter to move in mid-month so we’d have a couple weeks to make some changes and upgrades. Thankfully she had a place to stay for two weeks while she was “in-between” places.
One thing we wanted to do was replace our drain and overflow in our bathroom, which is located directly above the rental and causes some inconvenience for the renter if we ever have work done. If you’ve ever tried to remove an old drain, I’m sure you know where I’m coming from when I say it is a rather unpleasant experience. The older your drain is, the harder it will be to remove.
We tried the DIY approach, along with the help of our friend’s Dad who has done a lot of work on homes. Unfortunately we had no luck and had to call in a plumber. So I hopped on Angie’s list and found someone with high ratings. The next day he came over and I worked from home.
While he was working away at replacing the drain, he asked at one point if I was working from home. I said yes, and he said it’s nice that I have that option. I said something along the lines of “yeah it’s nice to have that option for situations like these.” What I really should have said is “it’s nice, but my job can be outsourced, at least parts of it. As a plumber you will always have work here in the Twin Cities, and that work can’t be outsourced overseas.”
I work with people in India almost every day. Outsourcing started at my work a couple of years ago. I’m not going to go into details about whether the arrangement has been smooth or not, but the fact is that work that can be done on a computer in theory – and oftentimes, in practice – can be outsourced to someone overseas for 1/3 the cost of paying someone in the United States to do it.
We can debate about a few of the details of outsourcing, such as whether income parity will happen fast enough to make the advantages of outsourcing negligible (I don’t think it will) or whether workers overseas have the right soft skills and knowledge base to execute at the same level as someone in the United States, but the fact is that some or all of certain job functions can be moved overseas and completed for a much lower cost.
If we look at the long-term job prospects of plumbers, electricians, and other people who work in various trades, I think it’s safe to say there will always be more work in the town or city they live in. Ironically enough, they may even get short-term contract jobs abroad for big pay. Remember my friend’s Dad I mentioned earlier? He went to India over ten times in one year on large contract jobs (he’s an architect by trade). The point is that the work required for plumbers and other trade jobs oftentimes require you to go to a physical location to perform your work. While this is obviously not the most ideal work arrangement for many – I personally love working from home and would do it full-time if given the option – there is more security in work that requires you to physically be present.
This is not to say that people looking into careers should rule out jobs that require working on a computer. It’s just an economic reality that there may be more competition for jobs at corporations where the work can be outsourced. At my own workplace when someone leaves for another team or a new job position, usually the team “absorbs” the job duties of the employee that left. This is inevitable as companies try to cut expenses and add to their bottom line, and in my opinion is much more preferable than layoffs.
Will jobs be entirely outsourced? Of course not. My friend did some programming work for a guy who was launching a website related to private chartered flights. The initial coding was outsourced to India. The programmer (or programmers) in India did a ton of initial work on the code. Once this initial work was done, my friend was given the code and he spent time cleaning it up, improving it, and adding some more specific features that was needed to make the site work properly. I think this work flow is a good example of what we will see more of in the future, not necessarily entire job functions moved to workers in countries with far lower cost-of-living.
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What are your thoughts? Do you agree that plumbers have more long-term job security than accountants because of outsourcing? If you were an executive would you try to cut costs through outsourcing?
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Outsourcing cannot be stopped as most of the companies want their job to be done with lower cost. Few jobs cannot be outsourced for sure. Yes in my previous company 70% of the work was outsourced and the rest was done here which used to save lot to the company.
Samgill 70% is quite a bit of work! That would be 70,000+ jobs at the company I work at. I think a slow transition is definitely ideal when it comes to outsourcing.
Boy is this ever the hot topic. I agree there is risk with lower level jobs being sent overseas. Quite a bit of risk. As a former Director of Finance I’ve seen a large majority of finance jobs be shipped overseas. However, the medium or higher level accounting positions will typically have great job security. A certain level of judgement and experience is necessary that just can’t be met overseas. An accounting or finance degree and a few years of experience will provide a heavy amount of comfort. But I have to say – a plumber or electrician, they do have it made in the shade. Everyone needs one at some point.
Taynia I definitely agree, Taynia, but the main problem with only medium to high level jobs remaining is that you need the lower-level experience to qualify for those jobs. Therefore young adults (20 and early 30-somethings) will have trouble getting to that level with less opportunities at entry level and slightly above.
DC @ Young Adult Money Taynia Totally right! It’s a double edge sword, yeah! Need the experience to get hired, but can’t get hired because you don’t have the experience.
Taynia Yep, the same difficulty most graduates have. Getting “in” is tough and I only see it becoming more difficult if outsourcing continues.
Outsourcing will increase over time but there will still be a lot of jobs here. I think the higher level positions will be here to basically check over the work that was done. I guess you could be happy to be a plumber and have job security or say that it sucks that you cant outsource your work like everyone else. Two sides of the coin just depends on how you look at it.
YourDailyFin I think one challenge for young adults in regards to high level jobs staying here is that you need to first go through the low levels to get necessary experience to qualify for those high levels. With less low level jobs, it’s hard to build those skills and get the necessary experience for the jobs that will remain.
I work in IT so I am fully aware as to how easily my job can be outsourced as I see it all the time. I just try to stay ahead of the game and provide a lot more value than someone who is based overseas can provide.
MonsterPiggyBank Can you provide more value than three people? Haha just kidding, kind of. The pay of three accountants in India = one accountant in the United States. But definitely taking it to the next level as far as the value you provide can keep you employed.
I would think, generally speaking, someone with a trade like a plumber would have a bit more job security as people will always be dealing with things they need help with and you really can’t outsource much of it. We had a friend as well who got to go overseas numerous times because he was freelanced to go help them with some issues and it ended up being a great experience for him. That said, we saw outsourcing in my old job and think it’s only going to continue. It did cut costs, but in our case it actually created more work as often times the jobs would not be done correctly.
FrugalRules I would say I spend 3x as much time on things that we outsourced. The hope is that “eventually” it will save time.
Interesting topic. I honestly don’t know enough on the subject to make an informed guess on the direction we’re heading, but there definitely seems to be some truth to the fact that there’s inherent stability in jobs that require you to be in a particular location. On the other hand, I think the advance of the internet both threatens some existing jobs and opens up a lot of new opportunities for people to do things they couldn’t have previously. So there are definitely pros and cons.
Matt @ Mom and Dad Money It’s funny how there are always pros and cons to most things ;) I think at a macro level it’s a positive thing, but can hurt people in their individual situations i.e. have to change careers or change the kind of work they are doing for a living.
Totally agree with you on this, DC, about the plumbers having more job security. My husband’s experience with outsourcing is that many times the work sent out to overseas workers has been sub-par, and they’ve had to have Rick and his team (he’s in mfg) clean up the mess and do it right, kind of like what you talked about, only worse than just making some improvements. Where it will go is anybody’s guess, but it sure would be nice of execs thought more long-term and quality-wise instead of just about dollars and cents before making outsourcing decisions.
Laurie TheFrugalFarmer I think execs always hope that they are timing it “just right” where they are outsourcing at a time when the quality of work is improving overseas, but it hasn’t really lived up to expectations. Then again, maybe the expectations for outsourced work is too high?
I definitely agree! I think there is a lot of $ making power in outsourcing, but like Laurie mentioned, sometimes the experience you have can be mediocre.
Suburban Finance Yep I agree with both of you. There can be some serious $ savings (serious…like millions upon millions if you scale it properly) but there will always be the issue of sub-par performance and output.
I am with you DC. Service people and laborers will always have work around their town (depending on the size) compared to people in the IT field. If you work on a computer, then you don’t really have the job security that you think you do.
DebtRoundUp I think more people need to recognize that outsourcing may come faster than they expect. I think being on top of your game skill-wise and really understanding what value you provide is going to help workers keep their job even if outsourcing hits their department.
Having a skilled trade is job security for life. (as long as you are healthy enough to do it). My friend works in carpentry and at 27 years old is reaching six figures. Not to mention the savings of all the DIY capabilities trade workers have.
brokeandbeau While I do not like the day-to-day work that plumbers do, I would kill to have their knowledge and skills for my own house. I wouldn’t have to worry about not being able to DIY when repairs need to be made.
It is incredibly hard to get a plumber to show up where I live. They are either all incredibly unreliable or extremely busy. I don’t know that any job is 100% safe, but laborers are not likely to be outsourced for sure. Can you imagine calling India for someone to talk you through unclogging a toilet?
Eyesonthedollar That’s really too bad that you can’t get them to come in a reasonable amount of time. I suppose one advantage of living in a metropolitan area is that you can get plumbers, electricians, etc. to come out to your house just about any time – and they have to compete for your business!
I definitely think plumbers have good job security. There will always be a need, and it’s not something that can be automated.
SenseofCents I agree! It would be incredibly complicated to outsource plumbing. I’m picturing someone overseas controlling a million dollar plumber robot. Just not economical.
For the most part, the jobs in our office can’t really be outsourced unless you want to decrease efficiency. Sadly, that’s why working from home will probably never be an option either. I think being in a trade is important for job security, as housing and maintenance jobs will always be in demand. At least until robots can do the job. =) I’m sure it is sometimes a difficult decision to outsource, and as others said, it’s not always the perfect solution. You can cut costs initially, but if there are mistakes, then more time (and likely money) is being taken to complete a task.
JourneytoSaving I think one advantage of working at a smaller business (I believe you do?) versus a larger corporation is that small businesses rely more on their employees than corporations do (corporations it seems easier to swap out people at will). Also, unless you can do it on a large scale the costs of implementing outsourcing really doesn’t make sense for small businesses.
As a business owner, I can appreciate the cost-savings of outsourcing some jobs. As a business owner/client, I can be extremely frustrated by some of the results of outsourcing. It’s definitely a mixed bag.
TheHeavyPurse Pros and cons, and it definitely seems like no matter what you will hit some speed bumps if you try to move work overseas.
I definitely agree that there are a lot of career options that are immune from outsourcing (plumber, mechanic…all the way to bartender, bouncer, etc.). However, there are unique threats to those locally driven positions, too (such as demographic changes). While population shifts might have a huge impact on how much work a plumber may have in a given area, someone working virtually at home might be more or less immune to such demographic changes.
As with most things, it’s a mixed bag.
DonebyForty Hmm I’d be interested in hearing more about your thoughts on how demographic changes will influence outsourcing. Definitely an angle I haven’t looked at before.
Good point DC! My job definitely has a lot of aspects that could be outsourced. Luckily for me, I work directly with the President of the company, and I don’t think it is likely that an outsourced person would be able to do that successfully.
ayoungpro What if they outsourced the President? Haha I don’t know what your current company setup is, or what you do, etc. but one thing that could happen with outsourcing is displacing even middle to upper management for various functions.
I am an accountant, so I love this article! Accountants have some of the best job security, but you are absolutely right about the job security in being a plumber! Way to go!
RetiredBy40 Some accounting has job security, but I think various accounting functions – i.e. account reconciliations or very manual monthly processes – can be outsourced with a little effort and planning.
I agree, there is a lot of job security in a job that will always be in-need and never going to be shipped overseas. The flip side is you have to deal with people’s crappers.
KyleJames1 Haha yep pros and cons to everything.
Not sure, but I think there is something to be said about having a trade skill like that. I do think accountants have pretty good job security overall though.
Beachbudget I think accountants currently have decent job security, but I think that will decrease over the next couple decades.
I definitely think plumbers have more job security than accountants. I have even thought of outsourcing some of the writing jobs I get that are boring. If you can pay someone else half the price you’re getting and then just edit and clean up their work then why not? I think outsourcing will become increasingly popular over the next few years.
we are a generation that is unable to do most simple things anyone could do 50 years ago (car repairs, oil changes, plumbing, electricity, etc) so there will always be jobs for manual trades, even more and more as we keep being digital natives who are more at ease with a keyboard than a screwdriver.
As an accountant, I can see where you are coming from. The old trades which the world has forgotten how to do (mechanics, plumbers, electricians, farmers) will become more prestigious in the coming years.
I can relate to this situation completely. I’m an accounting major and, while I technically work in finance now, much of my job is still accounting related. I work from home every day. My company, a Fortune 50, has shifted probably 70% of it’s jobs overseas in the last decade or so. So, the concerns you’ve pointed out here are very real. Lately I’ve been considering making the switch to a different company because the environment here isn’t all that healthy. Working from home is such a convenient luxury though that it’s really difficult to give it up.
I know that the plumber I use, for my out of town rental properties, that he can literally stay busy 10-12 hours per day every single day of the year. He has told me many times that he has to force himself to take time off every now and then but if he wanted to he could go years without taking a day off!
I’d say that’s some pretty good job security!