A New Twist in Outsourcing Jobs. Beware... This Will Spread

IBM has been "discussing" the possibility of "crowd sourcing" more than two-thirds of their workforce---over 200,000 jobs---in the next few years. While they refuse to acknowledge this, higher-ups in management have leaked this "discussion" so it appears to be very real.

The intent is to fire most of their engineers, developers---anyone they can---and then hire them back on a project-by-project basis. They will even encourage entire departments to spin-off into their own small business and contract for the same work they were paid to do as employees. This, of course, allows them to acquire other gainful work from other businesses---even competitors---but it appears this is OK with IBM. This is called "crowd sourcing".

The cost savings would be very significant as IBM will have eliminated the cost of their benefit package, including insurance, vacations, sick days, office space, overhead, etc. and IBM will not be paying for in-between days like, downtime between projects, and will have fixed costs for certain applications, knowing exactly what the contract will cost. The savings will be huge. IBM wins while employees probably lose. Time will tell. Actually, the theory is that both sides win as the contractors can charge higher fees, although they must pick up their administrative and overhead costs, and of course, IBM will save in a huge way.

Here is the point: Small business owners can learn from the big guys what to do in this changing economy.

Outsourcing is a factor that all small business owners should be considering. Reducing payroll and controlling your overhead are great ideas. Unfortunately, small business owners tend to fall in love with their employees and feel loyal to them, thus, they carry them on their backs, really working for them instead of the other way around.

Perhaps you should be looking at what the most successful businesses in the world are doing and take a lesson from it. Outsourcing is a factor. Buy the expertise when you need it. Subcontract your sporadic requirements, or even your major daily requirements. Have others manufacture, make sales calls, provide leads for you, service your clients, etc. Become a virtual company, hiring others to do the work on a contractual basis. Know exactly what your costs are and save the huge expense of doing everything yourself in-house. Consider doing what IBM plans to do.

It works; it is part of reinventing yourself in today's complex and changing economy. It is the opposite of what small business like to do, but maybe it is time to change horses and regain control of your finances. Maybe IBM is correct and is leading the way with a clear demonstration of how to do business now. Some will say this is beating up the employee force, taking advantage of them and getting more while paying less. IBM would say this is a practical way of doing business and that it makes financial sense.

Think about it and try it. Become more virtual, subcontract, outsource... maybe even "crowd source" as IBM is doing. This is a new age; it requires new thinking. IBM may be amongst the best run businesses in the world and it is not a bad idea to follow their lead. They are willing to outsource 200,000 jobs, most to the same employees they have now. Maybe you can do the same.

Call us at 413-584-2581 and we will arrange a no-obligation teleconference for us to explore your options.