Greater quality was the major factor cited by Carbonite for moving back jobs to the U.S. as well. The company’s call center in New Delhi, India was having turnover of 100% or more each year, said Tom Murray, the company’s vice president of marketing.
Meanwhile, turnover in its Boston call center that handled more serious problems was in the single digits. Murray said that allowed the Boston call center to provide much better service and customer satisfaction.
CNN Money News/June 16, 2011
“There’s a clear benefit associated with continuity,” he said.
For GE, the decision to reopen the Louisville plant, which had been closed for decades, was based on the fact that it’s no longer as expensive to hire more workers in the U.S.
Jim Campbell, president and CEO of the GE Appliance and Lighting unit, said that when you factor in currency fluctuations and rising wages in emerging markets, “when we look out five to six years, the United States is becoming a lot more attractive.”
That trend is likely to continue, said Harold Sirkin, a senior partner at Boston Consulting Group.
According to BCG, Chinese labor costs are rising about 15% to 20% a year. That makes producing goods in China not nearly as cheap as it used to be. For many manufacturers, that narrowing is enough to tip the balance back to U.S. plants.
“I think for many goods, people will say, ‘I don’t want to offshore to China because the economics aren’t as good as making them in the U.S.,’ Sirkin said.
Still, some think the number of jobs coming back to the U.S. will remain relatively small.
“I worry that there’s a very big deal being made out of a few anecdotal instances. I think it’s a lot of wishful thinking going on,” said Alan Tonelson, a research fellow for the U.S. Business and Industry Council, a trade group.
What’s more, countries such as China and India that have profited from U.S. offshoring won’t stand pat and lose the potential jobs without a fight.
“It’s not as if the Chinese government is helpless is to offset this rising wage trend,” Tonelson said.
First Published: June 17, 2011: 5:34 AM ET