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Infinit-O is the preferred and trusted partner in business process outsourcing (BPO) and knowledge process outsourcing (KPO) solutions for small and medium-sized businesses.
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  • Back-Office Outsourcing Attracts Government Units, Labor Unions Oppose 0 comments
    Jun 10, 2011 9:11 AM | about stocks: TTEC, S

    It is known that outsourcing affects the local employees especially those in US and UK where most companies are seeking outsourcing. Most people in those regions see outsourcing as the main cause as to why the unemployment rate goes up. This may be true in some cases, since companies take measures to lay off some of their employees especially when redundancy takes place. Usually, those in the back-office department and those conducting administrative tasks are the ones who experience this. In fact, there have been disagreements among companies, governments and labor unions in some areas across the globe because of actions being undertaken by companies. However, companies try their best to conduct necessary measures when dealing with this.

    Recent news show that labor unions in the United Kingdom such as UNISON and UNITE are protesting the what seems to be a possible transfer of back-office processes of British local government units to India, the outsourcing destination heralded as number one by most industry professionals. Capita (LON:CPI), a provider of IT and call center services, is the company with whom the Birmingham city council has partnered with. It was mentioned in the article that Service Birmingham, a venture by the branch of the local government unit and Capita, claimed that no local employees in the city has lost their jobs. However, the main concern of labor unions in the United Kingdom is that even if only 50 job positions are being filled by Capita, other government units may also follow suit and companies as well.

    Despite the disagreements arising today, the local government units would not allow for their constituents to be on the disadvantageous side. In fact, the move was said to be driven by the government’s desire to provide efficient services to the city. Satisfactory opportunities, if not better, will still be created by government units for their local employees.

    Even if back-office outsourcing is gaining notoriety, it still does not hinder companies and government agencies to seek the assistance of back-office solutions providers because of the benefits the industry is pitching to its potential clients.

    Another report of a government unit in United Kingdom seeking the services of an outsourcing firm is Lancashire County Council. BT Global Services, the chosen partner of Lancashire County Council to support their IT and back-office functions, pointed out that this particular partnership is a key contract for them as this allows them to expand their presence in a sector in the market that is crucial and important. In fact, it has been a crucial point for local government units because such moves to outsource their processes are already attracting negative feedback from unions in their region.

     With local labor unions, back-office outsourcing is becoming unpopular, but with companies and government agencies alike, it is a means for them to be able to provide better and efficient service to their clients and constituents.

    Clearwire Corporation (NASDAQ:CLWR) also decided to outsource some of its back-office processes and they have chosen Teletech Holdings Inc. (NASDAQ:TTEC) to provide the services. One option that was taken by Clearwire and Teletech, to avoid letting go of employees, was for the 700 Clearwire customer support agents to be absorbed by Teletech. This way, if there will still be employees to be let go, it will not be as massive.

    On the surface, outsourcing may be seen as an industry that will take the jobs of those in a specific country; but that is not always the case as there are options that can be done to avoid such problem. 

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
    Stocks: TTEC, S
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