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Management Matters - Management Hiring Abroad

Management Matters: is a New Article series dealing with the issues that arise when managing personnel and how to optimize your current staff in a company.

Management Hiring Abroad
April 1st, 2017

Some of the largest corporations today in the United States are beginning to shift their hiring abroad. This trend is coming at a time when many people at home in the United States are in need of jobs. Management of these multinational corporations are starting to employ many more workers overseas while also cutting the jobs at home. This shift towards hiring more in other countries exemplifies the important role nations abroad play in the world economy. The Wall Street Journal reported on management shifting their hiring trends and how, “the growing importance of other economies, particularly in rapidly growing Asia, to big U.S. businesses such as General Electric Co., Caterpillar Inc., Microsoft Corp., and Wal-Mart Stores Inc…The data also underscore the vulnerability of the U.S. economy, particularly at a time when unemployment is high and wages aren’t rising.” These companies are just a handful of corporations who are reaching outside of the United States to “set up shop.”

Are There Benefits?

Although the majority of people in the United States argue against taking jobs away from people at home and moving them abroad, there is a side to the debate that highlights the benefits of hiring abroad. Many people believe that the trend towards hiring abroad helps all parties involved. These people point out that the corporations going abroad can benefit from lowered manufacturing costs while also forming bonds and relationships with countries overseas. They also determined that this would benefit the consumer because they will be able to purchase cheaper goods in the end- getting a higher quality product at a lower price. Most people would agree that this is a positive perspective to the ongoing debate surrounding this issue.

What Are the Downfalls?

The other side of the debate, which is not in favor of hiring abroad believes that even if goods in the United States become more affordable, consumers will not be able to spend as much on these “cheaper” products because they will most likely be unemployed. They argue that jobs will disappear from the United States, which will have a direct effect on the American economy. Without the middle class consumers, the country will continue to struggle financially.

These people are asking where the American consumer will get the money to pay for goods and products that are produced abroad for a more competitive price. This argument also touches on the rise in cost of food, gas, and other important commodities, hiring will be going down in the United States. The majority of hiring abroad will most likely occur in developing countries, where the goods and labor are cheap. These countries also tend to have more space for larger corporations.

Overall, while the small companies in the United States are important to the country’s economy, it is the large multinational corporations who contribute an even greater amount to the economy’s fluctuation. As The Wall Street Journal also reported, “Other observers (in this debate) see the trend as a failure of U.S. policies to counter aggressive foreign governments…a combination of the U.S. tax code, the declining state of U/S. infrastructure, the quality of the country’s education system and barriers to the immigration of skilled workers may be making the U.S. less attractive to multinationals.”

 

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