Can Oz compete in the outsourcing market?

Neighbours should be there for one another

Could Australia become one of the next outsourcing hotspots? The country certainly has part of what people are looking for: a well-educated English-speaking (well, up to a point) workforce, technologically adept and almost certainly with more knowledge of other English-speaking cultures than any of the others have of that in Oz.

Most Englishmen only know of Neighbours and the cricket (tee hee) – while it seems that at any one time a decent percentage of the young Australian population is tending bar somewhere on their travels.

On the downside, Oz also has some eyewatering labour costs. This isn't just a result of the Aussie dollar soaring on the back of the minerals boom (something unlikely to end soon unless the Chinese economy implodes) – it goes deeper into the structure of the economy than that. Wage differentials are entirely different between the Happy Country and either the US or the UK.

Top-end wages and salaries aren't all that different: Murdochs and Packers are rich whichever country they live in and Fairfaxes less so than in the past. Low-end incomes, however, are much higher in Australia than they are elsewhere. Someone doing the grunt work of roofing, bartending or janitoring in Oz will be earning a substantial fraction more than someone doing the same job elsewhere. And this carries over to those who might be suitable recruitment targets for outsourcing or offshored jobs.

Those Australians who do the basic coding, or read x-rays and MRI scans (an industry successfully offshored to India), or those who do back office work such as payrolls and accounting, will be earning more. This is not just as a result of being in a rich country with a rising currency, but also more relative to the general wage scale than those in other English-speaking countries.

So at first blush there doesn't seem to be a persuasive case for trying to make Australia an offshoring centre. It has lots of clever English-speaking people, yes, but those aren't in all that short supply. What's wanted by the capitalist classes is cheap people who can do the necessary – and that is not something that is on offer.

Time is on their side

But price isn't everything. And there are indeed businesses that are using Australians as offshored workers. The secret is in that the workers are both English-speaking, and live in a different time zone (of course, the place being rather large). One of these businesses is the Daily Telegraph: the English one, not the Tim Blair one.

As Private Eye has been telling us for the past couple of years, the subediting for the paper has been done in Australia at £45 a page ... not per page of newsprint, per standard page defined by word length. (For those not in the business, editing is deciding what should go in the paper, subediting is writing headlines, intros to stories and sorting out the language that the journos themselves submit – plus layout, photo captions and so on.)

The economic motive is to save money, of course: but how can this be done when the wages of the type of people hired to do this sort of work are likely to be higher in Australia than in the UK? The answer is that time zone thing. The UK newspapers tend to get their first editions to bed (to the printers) early in the evening. These are the editions that go on the trains off to distant parts of the country, like Yorkshire, or even to other countries, like Scotland. As the evening progresses into the early hours of the morning, the editions for places closer to the printing plants come off the presses: traditionally, the papers on sale in London are the last to be printed.

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