Education too slow in responding to globalisation? Australia joins developed world in escalating outsourcing skilled labour overseas - retrenchments and net job creation

There is always a silver lining to negative news provided we vigorously address problems and plan for the future. 


Get used to it: sending jobs overseas is the way of the future
http://www.theage.com.au/national/get-used-to-it-sending-jobs-overseas-is-the-way-of-the-future-20121009-27bfh.html


Outsourcing has become a dirty word, threatening to cut more jobs of locals as companies seek lower cost of labour and production overseas. Rather than resisting and putting up artificial blocks, which won't work  anyway, we should go with the flow. Trade restrictions and doing nothing would only weigh us down and put us further behind the competitors.  

Having said the hard truth, outsourcing has gained a momentum of its own. The question is how to ride the storm and survive, if not thrive well. It is a challenge for the state to set the right direction and actually putting money where its mouth is and getting things done. Or else we are doomed. But looking at the way education and health budget is being slashed, procrastination and bickering over unimportant issues, the picture is more gloom than most politicians would like to believe. 

Retrenchments have splashed ruthlessly across corporate human resources lately and putting stress not only to those made redundant and their families, but co-workers who are fortunate enough not to be laid off, but left to do the extra jobs of the less fortunate who have been made redundant. The cull and more to come has left deep psychological scars on everyone and 

The well-connected and those armed with current, relevant and highly sought after skills have nothing to fear. Most are able to get another position in a related field or industry, often in the ex-employer's competitor firm. 

However, as the high performing developing countries with huge economies such as India and China move up the skills and value added ladder, the number and spectrum of jobs they are capable of performing as well as Australians increase as well. 

Quote : Occupations most at risk include those in information technology, administration, and jobs in finance and insurance and the professional, scientific and technical services sectors.

Indeed, I was taken aback when I realised that some IT and accounting staff processing our requests and orders are based overseas, contactable only by email (which they normally respond within minutes barring time zone difference), and whom we would unlikely to ever meet face-to-face. So it won't be surprising that even scientific trials that require long hours including weekend work, can be moved offshore. 

The bottomline for most companies is to get the job accomplished at the least possible cost. The issue is that Australian labour is getting too expensive (to catch up with rising cost of living and aspirations) taking into account extra hours and weekend penalty rates, leave allowance, labour protection laws, workers' compensation and taxes, and a long list of regulatory compliance requirements, which are still unheard of or de-emphasised in most developing countries. 

So, where does that leave the majority of the redundant workers? professional nursing or basic home carer for the old age and autistic kids. However, for a middle-ager making a career switch to a highly demanding (both physical strength and mental alertness), it is less than ideal for both the worker and the client.  

The young and fit would be better off become skilled tradesmen who are in perpetually short in supply and could pick and choose the type of work to do and when to turn up. This sounds familiar to most households who need small jobs done. Such jobs are difficult to outsource and safe as long as most Australians remain not so handy and technically incompetent. 

Australia's education score for high school and universities ranking remain dismally poor compared to US, UK and now Asian schools. Those who complain about competitiveness in local education system should take a look at the level of proficiency that counterparts offshore have attained in Math, Science and languages. The local curriculum is slow in adapting well to current needs and keep up with the fast-changing world. The skills gap can only get more skewed. Concerned more with niceties and political correctness instead of facing up to difficult tasks, majority of our school leavers and graduates can only hope to rest their laurels in gaining local recognition.

NewStart and financial assistance for business start-ups are costly and merely serve as a bridging measure to help Australian families. Most distressing is the recent cut in funding for TAFE courses deemed less essential and important. Inevitably, more will fall beneath the cracks and modern day borderline poverty may worsen. This may just be the beginning of a downward spiral. 

http://www.brisbanetimes.com.au/opinion/political-news/single-parents-fear-newstart-will-set-them-back-20121009-27bas.html

http://www.theage.com.au/victoria/tafe-cuts-advice-to-be-kept-secret-20120922-26dud.html

We need more than temporary stop-gaps which will stave off discontent and political inconveniences. But for a nation to remain economically viable in the long run requires better economic planning and proactive education policies. 

Afterthought : I have since written an update of the pain outsourcing threatens to affect each and everyone of us. 

http://ausletters.blogspot.com.au/2013/05/outsourcing-at-irrational-scale-to.html

Tiger Airways better exit Australia market but too early for Qantas to celebrate

Singapore Airlines has learnt the painful way that major investments must be closely monitored hands-on. It is bad news for budget travellers but safety issues should prevail for everyone's good.

The pathetic quality of service and business ethics (or the lack of it) that plague Tiger Airways are simply unheard of in recent time. It is like between the earth and sky from the image and league that SIA belongs.

Allowing autonomy could be very costly especially when the executives and management do not deliver sterling quality and great customer service. Read : Tony Davis. Tiger's image and brand name is as good as gone in Australia.

The only saving grace to cut losses from Tiger's exit of the Aussie market is an earlier alliance forged between SIA and Virgin that will hopefully help to make up for the business losses and opportunities to keep Qantas on its toes for the lucrative trans-Pacific route.

Quotes :

Singapore Airlines has always presented itself as an arm’s-length, passive investor in Tiger Airways. It would appear that is no longer the case. The grounding of Tiger’s Australian fleet until at least the end of this month has ignited a flurry of activity within the boardroom of its Singapore parent, culminating in the departure of its Australian chief executive, Crawford Rix, and the appointment of the parent company’s chief executive, Tony Davis, as the local CEO – presumably on the basis that he was responsible for the turmoil and therefore it is up to him to fix it.

Singapore Airlines, which holds just under 33 per cent of Tiger’s capital, and the Singapore government’s investment arm, Temasek Holdings, which controls about 7.5 per cent, would have been embarrassed and aggrieved at the mess Tiger has got itself into in Australia. It appears they have been spurred into taking aggressive action to wrest control of the boardroom and the situation. Apart from the financial and brand damage Tiger has experienced, Tiger’s inexplicable decision to defy the public warnings of Australian Competition and Consumer Commission chair Graeme Samuel and continue to take bookings, until it finally backed down under duress on Tuesday, would have caused consternation in Singapore, where defiance of government authorities isn’t usual.

Qantas, through its Jetstar brand, and Virgin Australia could also be expected to seek to put a lot of pressure on Tiger if it is allowed to resume services, in the knowledge that an already loss-making business will be even more vulnerable in its damaged state. Tiger is likely to need a lot of time and capital if it is to re-establish itself and become a viable competitor in this market. Tiger’s Asian operations are profitable and growing and it may make more sense for the reshaped board and senior management to abandon the Australian market and redeploy the ten planes in the local fleet elsewhere.

Tiger Airways faces a tough task in coming back from its month-long grounding, Virgin Group CEO Sir Richard Branson says.
The Civil Aviation Safety Authority (CASA) has decided to extend Tiger Airways Australia's initial week-long grounding, which had been due to end on Saturday, until August 1.

http://www.businessspectator.com.au/

Qantas should not be complacent and absorb some lessons from the Tiger episode. It is high time for bystanding "winning" airlines to take the cue and try to iron out its own internal technical, organisation, services and security lapses.