Offshoring the result of “poor HR leadership”: Minister

by 09 Feb 2012

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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  • by Patrick Comerford 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!

  • by Peter Kay 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.

  • by Caleb 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.

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