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From Outsourcing to Best-Sourcing? The Global Search for Talent and Innovation

Srinivas Rao Pingali, Janet Rovenpor, and Grishma Shah

Introduction

Outsourcing has received a poor reputation in the media, general public, and political arena in the Western world. It has been criticized for domestic job losses and the exploitation of unskilled workers in developing countries. What most opponents do not realize, however, is that there are different types of outsourcing, some of which may involve corporate efforts to lower overhead costs by gaining access to low-waged labor while others entail the acquisition and retention of highly skilled and talented professionals who are valued for their ability to innovate. There is no one- size-fits-all approach and not all outsourcing is harmful. A KPMG survey, entitled, Top Market Trends and Predictions for 2016 and Beyond, revealed

S.R. Pingali

Quatrro Global Services, Atlanta, GA, USA J. Rovenpor • G. Shah (h)

Department of Management and Marketing, Manhattan College, New York, NY, USA

© The Author(s) 2017

S. Kundu, S. Munjal (eds.), Human Capital and Innovation, DOI 10.1057/978-1-137-56561-7_7

that talent shortages and challenges were of the highest concern and had the largest negative impact on businesses. Global companies can create a competitive advantage in the market place by attracting the best people from all corners of the world. The “war for talent” has become “the new norm” (Brown, 2016).

During the last two decades, American firms have sourced talent for white-collar jobs from across the globe. While this was originally only for low-end business processes, the work now sourced from abroad is highly skilled and technical. For example, according to Google’s corporate website (2016), Google has more than 10,000 employees in India and despite having no consumer presence in China, it still employs close to 1,000 engineers in Beijing and Shanghai. In fact, more than 55 % of Googlers are employed outside the USA, with a majority of them being in emerging or developing markets. Digging deeper, we find that many firms, including large banks, social media and technology companies, like Goldman Sachs, Facebook, and Microsoft, source a large chunk of their talent from abroad, often through third-party contractors. Apple Inc. compensates independent software programmers to develop iPhone apps; Forbes.com relies on its own journalists as well as external bloggers for its content; Bharti Airtel relies on IBM and Ericsson for critical mobile phone infrastructure services (Power, 2013).

Similarly, the search for outstanding athletes from around the globe is common in professional sports organizations—the NBA, FIFA, MLB, NHL, and MLS (Foster, O’Reilly, & Davila, 2016). On opening night of the 2015-2016 NBA season, player rosters featured 100 international players from 37 countries and territories (up from only 21 international players in 1990-91).[1] Gearing up for the 2014 World Cup in Brazil, the US men’s soccer team recruited an increasing number of players from Germany who were fortunate enough to enjoy dual German-American citizenship (Sciaretta, 2011). It is the premise of this chapter that a new revolutionary form of outsourcing has been occurring. It is simply a prudent strategy in which a company seeks the best talent in whichever geographic area it can be found, often leading to innovative advantages.

In this chapter, we review the history of outsourcing, define commonly used terms such as “outsourcing” and “offshoring” and provide details on a new generation of outsourcing—i.e., the global search for talent or what we are calling “best-sourcing”—that has quietly evolved over the last 20 years. We discuss the various forces and trends that have the potential to encourage firms to intensify their outsourcing efforts for knowledge professionals (e.g., expanding opportunities in cloud computing). Via case studies, we illustrate the growing trend involving the outsourcing of high-end, value-creating, knowledge-based activities and argue that significant benefits in innovation can be achieved, leading to superior competitive advantage.

  • [1] http://www.nba.com/2015/news/10/27/nba-rosters-feamre-100-intemanonal-players/; http:// www.nba.com/2014/news/10/28/international-players-on-opening-day-rosters-2014-15/
 
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