Offshoring the result of “poor HR leadership”: Minister

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Business leaders have issued a stern response to comments by employment and workplace relations minister Bill Shorten, who said yesterday that the tide of off-shoring is a band-aid response to the high cost of doing business in Australia, and organisations could get better productivity by retaining their workers long-term.

“The easiest thing sometimes to do is just move people off your books, whereas I think sometimes if you take a longer investment attitude in people, you tend to get better productivity, better loyalty,” Shorten told ABC radio yesterday. “Long term, not short term, should be the order of the day.”

Fresh from off-shoring some 1,000 jobs over the past nine months, Macquarie Group deputy chief executive Greg Ward said for some professional positions it was cheaper to hire people in London or New York than in Sydney. Ward said Macquarie now employed more than 1,000 people in India and the Philippines, in “support roles” for financial, technology and HR roles – an increase from just 100 positions four years ago. “There is also the question of the access to the talent pool in Australia,” he added.

Professor Ian Harper, partner Deloitte Access Economics and former head of the Howard government's Fair Pay Commission, commented that offshoring jobs was indeed “the exact opposite” of a short-term solution and the current workplace laws fail to encourage productivity. He said businesses that turn to offshoring often do so as part of a large-scale change to the way they run their labour force. “The only thing the services sector can do to protect itself is to improve its productivity,” he added.

But according to Shorten, organisations should be very mindful of the long-term impact on their brand of offshoring or cutting jobs. “No one ever made a bad run of it by showing loyalty to their employees and investing in their people. Some elements of the big end of town are misguided if they think off-shoring Australian jobs is the panacea for their problems. Blaming the Fair Work Act for productivity issues is blame-shifting from a lack of HR leadership.”

The Business Council of Australia also weighed in on the debate, adding that it is crucial for businesses to have the flexibility to respond to changing market conditions. “It is critical that businesses ... adapt and remain strong in the face of challenges from the global economy,” chief executive Jennifer Westacott said.


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  • Patrick Comerford on 9/02/2012 6:57:38 PM

    Has Bill Shorten ever been an employer, payed payroll tax, work cover, superannuation, has he payed out on sick leave and long service leave liabilities, suffered a down turn and had to survive, been sued for unfair dismissal, carried customer debt, had to actually sell anything????? I don't think so!

  • Peter Kay on 10/02/2012 2:48:22 PM

    Clear to see now why our IR Laws have moved so extremely the other way under this Govt. Maybe a big scare campaign advertising 'blitz' by the Employer Groups to scare the heck out of voters at the next Federal Election like "Bills Boys" did to Howard.
    I agree with Patick's comment. Never had to run a business in their lives half of them. I wonder if Bill Shorten contemplates how business owners lay awake at night wondering whether their business will survive for another 3 or so months coz things are so tough ??
    Nah ! Look at the real world please, not the rarified atmosphere of Parliament House.

  • Caleb on 6/03/2012 3:01:31 PM

    Off-shoring definitely damages your business brand. How many people hate Telstra and having to talk to someone in a call centre in India prentending to have a different accent?
    It's reasonable to expect to be able to talk to a local representative of the company you are dealing with.

  • Louise Vidler on 8/03/2012 11:54:47 PM

    Why is Bill blaming HR for the off-shoring of Australian jobs, when it's purely a financial decision that's responsible! God save all the clerical and customer service employees in Australia. Maybe we can become the new mining generation?

  • Robert Lopez on 24/05/2012 2:21:24 PM

    Offshoring is a complex issue re Australian jobs. If you take Dicks Smith’s view of the world, which I do, there are 7 billion people on this earth not just 23 million Australians. Money going offshore may or may not cost Australian jobs but it also lifts people overseas out of poverty. An Australian may have to go without a new plasma TV but and citizen of Pakistan may be able to pay for medical treatment they could not otherwise have afforded. There is close to 50% youth unemployment in Spain. As an ex employer in Western Australia I learnt all about the work ethic of some Gen Y’s. I doubt that kind of attitude is overly present among Spain’s disenfranchised unemployed. What is wrong with offering Spanish youth a chance of work in life? It is just plain wrong to think about someone who does not live in Australia as being less a person than us. Charity may start at home but Australian’s waste billions of dollars every year on premium pet food, TV’s, new cars, electrical gismo’s and so on. The world is flat and if we are going to have a future wealth needs to be spread around. Finally, offshoring is not charity – it is about people with less money than us working hard for a living. They are not asking for something for nothing, they just want to work!

    Robert Lopez

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