Posted by: Brad Nixon | November 3, 2010

R.I.P “Outsourcing,” ca. 1989-2010

Well, the election’s over, I’m sure all your candidates won, and, as soon as they keep their promises, there’ll be a chicken in every pot but, in California, NOT pot in every chicken.

With the end of the election and all its attendant bloviating, obfuscation, mendaciousness, overspending and general doo-dah, we must also bid farewell to the effective use of another word in the English language.

I hereby declare the word “outsourcing” dead as a useful term. Responsible writers will cease to use this word once I reach the end of this piece.

I’ll explain.

Imagine, class, that you have a thriving business manufacturing and selling — as we all long to do — incredibly expensive items coveted by the rich. These items have no practical purpose and serve only to be signifiers that the person sporting one has more money than Madoff, except that they made off with it (ahhh, that was satisfying!).

So, you’re making these things as fast as you can, running your sweatshops day and night, loading boxes of fabulously expensive goodies into the trunks of waiting limousines to be ferried to the homes of the stinking rich and unaccountably famous.

One day, you realize that as your business has grown you’ve also accumulated an ungodly number of accountants, HR people, computer technicians and other staff (along with the essential butler, valet and manicurist). Every day, someone from finance or HR or MIS is in your office telling you that they need to hire another accountant or actuary or network administrator to keep up with the growing enterprise. These people are costing you a fortune and paying their salaries is preventing you from qualifying to be included in Bill Gates and Warren Buffet’s challenge for multi-millionaires to give 10% of your money to charity — not that you’re going to do that, of course, but you want to be on that list.

The solution? Outsourcing! Your stock in trade is making and selling obscenely expensive doo-dads; we call that your “core business.” Accounting and HR and computer technology are NOT “core,” so you cut a deal with companies who provide those services. In the resulting arrangement the individuals (or at least some of them) who were formerly your employees become employees of the firms you’ve contracted with to provide their services, and your payroll problems disappear. (Of course, these firms already have armies of actuaries, HR practitioners and network administrators, so only a few of your former employees will be hired by the outsourcing providers, but that’s their problem.) You now have a set of fixed-rate service agreements with those specialist firms, and every time they come and ask for more money you can negotiate as hard as possible with them, threaten to give the contract to one of their competitors, and so you keep your expenses low. Goodness knows you’re already spending enough money paying people in your sweatshop to sew diamonds onto ostrich leather or embed gold leaf into lead crystal beads for your doo-dads!

As a result, you have outsourced your non-core functions. Now class, I’m writing the key phrase on the board. Please copy this into your notebooks. It will be on next week’s test: “outsource non-core functions.”

I’ll give you a real-world example. The federal government runs lots of facilities from big office complexes to military bases. A military base, for example, can be a mammoth operation, requiring landscaping, building maintenance, food service and a fire department. For some of these services, the government hires contractors to do the work. Those jobs have been “outsourced.” American citizens still perform the work, the jobs haven’t been moved to India or Malaysia, they’ve just been outsourced.

“But,” you object, “We have just come through the seventh or eighth consecutive election in which fiery speeches rained down from pulpits and in airport hangers and in town halls decrying the outsourcing of jobs to India and Malaysia and South Carolina and other places outside the U.S. In California, two of the biggest candidates for major offices were excoriated by their opponents for being ardent practitioners of outsourcing! You didn’t say anything about sending your HR jobs to India in your description!”

That’s because, children, sending jobs to another country where wages are low and things like regulated work hours or job safety precautions don’t exist is correctly referred to as “offshoring.” Those workers in sweatshops in the interior of China or malaria-ridden swamps in equatorial Africa might very well be your own employees: you just don’t have to pay them enough to stay alive or make sure that they’re not breathing cyanide gas in those places because life is just tough there. You’ve “offshored” those jobs, not “outsourced” them.

I can tell by your silence that you’re thinking about this, so I’ll wait.

This distinction between outsourcing and offshoring is useful. In a perfect world, a computer tech at a company that makes doo-dads for the rich might benefit from being outsourced to a technology company: it’s full of other people in the same business, and there’s probably more opportunity for training and advancement in a company in which he or she is a specialist. The same holds true for accountants and benefits managers or even food service workers at that company supporting the military base.

When we confuse outsourcing and offshoring, we muddle two completely different things together and lose an opportunity to distinguish two usefully distinct actions.

But, it’s too late. The battle for clarity is over, and clarity loses, as it always will when language is involved. One single term, outsourcing, now stands for the dislocation of all labor, whether it is responsible or exploitative, well-considered or simply rapacious. We’ve created a blanket term that suffocates meaning and will be used to tar many people with the same brush, apply the feathers, and run them out of town on a rail. Even the Wall Street Journal and other serious business publications, ultimate arbiters of business language, have ceased to distinguish between the two terms. I surrender. “Outsourcing” henceforth WILL carry both its classic sense of repositioning workers into specialties, but also moving work to low-cost offshore centers. I’m done.

I offer hope, though. Language is powerful. When there is a concept that must be articulated precisely, languages have a penchant for generating a word or phrase that will be applied, and we’ll adopt it quickly in this era of instantaneous, simultaneous communication. It’ll probably be a word in English, since that’s the lingua franca these days, and the only people who won’t adopt it will be the French. C’est la vie.

© 2012 Brad Nixon


  1. The job of a politician is to generalize, confuse and lie in order to motivate the voters to support that politician and his or her position (and hence to be elected and reelected — hopefully for a life on the public dole). Hence, all jobs not performed by paid company employees here in the U.S. are “outsourced.” The outrage of it all! This is the cause of all our problems! Something must be done!

    True, language is powerful, and politicians know this. So, your word of the day is not yet done. It will live on until the pols and other talking heads find another catch phrase or word that will make them sound (without actually being) knowledgeable and concerned. Do not hope for precise articulation or accuracy of description in your lifetime. It will not happen, Mr. Orwell.


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