There is one most obvious and logical reason why companies increase outsourcing during recession: cheap foreign labor. BPO companies especially in Asia are not threatened to be closed down even with the logically explainable protectionist policies that emerge in a time of economic meltdown. These outsourced offshore offices are confident that they are still part of good business sense because they offer what homeshore offices cannot: cheap labor.

In a recent survey of 600 small businesses to assess how their outsourcing plans are affected by recession, survey results showed that 41.9% said their view on outsourcing has not changed and, in fact, plan to outsource more in the near future. The topmost reasons are that they have cut full-time staff (employment was one of the first aspects that the recession altered in homeshore companies) and that they are now incapable to hire full-time staff.

This expected decision by homeshore companies comes at no surprise. In the IT business solutions and customer care call center businesses that have been outsourced to such countries as India and the Philippines respectively, these companies have long been enjoying cost-effectiveness in their operations. IT professionals in India are at par with some of the best in the world, yet they come at a percentage of the cost that these capacities would otherwise rate in the West. In the case of customer care offshore operations, homeshore companies have discovered that the level and quality of English language usage in call center operations in the Philippines make it undiscernibly offshore.

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Via oDesk blog