blog We can’t help but be amused by this article in New Zealand’s premiere business newspaper, the National Business Review. In it, veteran technology reporter Chris Keall lampoons an email received by subscribers of the Australian Financial Review, in which the paper’s editor in chief Michael Stutchbury laments IBM Australia’s decision to send jobs offshore, including to New Zealand. Keall’s reaction?
“Australia’s pain is New Zealand’s gain. IBM won’t be the first to move jobs eastward across the Tasman. The Australian Financial Review itself moved subediting jobs to the cheaper environs of NZ. Heinz moved 300 jobs from Queensland and Australia to Hastings, iiNet (Australia’s largest independent ISP) has moved part of its call centre operation to NZ, and the CEO Vocus, which last year bought NZ ISP Maxnet, tells NBR ONLINE his company is looking at building data centres here – in part because labour is cheaper, but mostly because of our cheaper electricity.”
As Keall points out, the shift is not just about wages; companies such as IBM would be able to source even cheaper labor for IT work throughout Asia, particularly in India and Malaysia. Instead, it’s about being able to cut wage costs by a certain portion while also being able to maintain much of the cultural similarity of the workforce, and the regulatory similarity in dealing with workforce laws in the two countries. Australian clients notoriously don’t like dealing with Indian workers or call centre staff, but dealing with New Zealand? That’s probably OK.
From the perspective of Australia’s IT workforce, it’s obviously not great that the jobs are going offshore at all. But Keall’s article does raise an interesting point; IBM is operating in a global market. If we want IBM to keep skilled IT jobs in Australia, as a country we need to start competing more strongly in that market — training more skilled IT staff locally on an ongoing basis, cutting corporate tax rates and deregulating labor laws to ensure it’s easier to employ staff. We all know the list of things which companies want — and it’s not always about money. If Australia doesn’t do more in this line, it’s inevitable that we’ll find more of our jobs going offshore.
Companies like IBM, which operate in every country in the world, truly do have the option of picking and choosing. Unfortunately or fortunately, depending which way you look at it, that’s the nature of capitalism. There’s no incentive for a global company such as IBM to keep jobs in Australia for nationalistic or altruistic reasons. That’s just usually not good business.