When it comes to defining what workplaces are, times are a changing that’s for sure. In recent decades, the trend towards globalisation has seen manufacturing move to low-cost locations such as China, India and Taiwan. The world of manufacturing has been significantly and irretrievably changed. Those businesses operating in high-cost jurisdictions have survived through specialisation and the development of unique intellectual property. As a consequence in the last 20 years, the size of the manufacturing sectors in high-cost jurisdictions such as Australia have been significantly reduced, with many jobs having been lost for good.
The development of technology is now enabling a different shift to occur but this time, not only manufacturing sectors will be affected. This shift is underpinned by an unprecedented level of access to flexible labour.
The Ever Evolving Workplace
Once upon a time, in order to provide white collar services to a business, it was necessary to physically be present in the office. That is no longer the case. The rapid development of mobile technologies including mobile phones, tablets, wireless communication, home computers and the like have now enabled people to have far more flexible workplaces than they previously had. Combined with the shift to easily accessible software and centralised data, the possibilities for flexible work locations are becoming endless. In addition, a large sector of the workforce is now demanding the flexibility that comes with the advent of such technology. Junior staff members have been brought in through a university system where working flexibly connected only through technology isn’t just a possibility, it is a way of life.
Whilst there are risks that relate to these developments, there are also significant benefits which can be availed by businesses willing to embrace the changing of workplaces. Costs which were previously regarded as fixed such as rent, fit-out, electricity and the like can now be reduced substantially. Labour that previously was only employed on a full-time basis is now available on a casual or contract basis when required. The internet acts as a connector linking demand with supply at the most competitive price.
The advent of these new technologies and also the rise in quality and accessibility of free video conferencing programs such as Skype and VeeSee and online collaboration tools provided through packaged services such as Google+ also make it possible for businesses to engage labour working remotely from overseas.
This access is revolutionising the opportunities for businesses. Consider this; the average Australian wage for a junior accountant based in Australia is approximately $70,000 to $80,000. An equivalently skilled and qualified accountant can be sourced in the Philippines for approximately $18,000 to $22,000. These savings are not just limited to accountants either, with highly qualified staff being available in a range of areas including software development, marketing, social media management, back office support, accounting, engineering and legal just to name a few.
At the moment, the quality of overseas labour is patchy, with some being of an equivalent or higher standard and some being well below par. As time progresses however and as more businesses avail of this unprecedented access to low-cost labour, the quality of the skills available in developing countries will likewise increase. There are huge populations living in areas including Asia, South America and Africa whose relative wages are a fraction of those in the developed countries.
Whilst there was a significant impact flowing from the movement of manufacturing jobs to low-cost jurisdictions, it is likely to pale in significance when compared to the likely impact of white collar services moving the same way.