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Where is Outsourcing Headed?

Monday March 8 2010

A person I know did work for a temp firm that hires employees for major high tech manufacturers in Austin. All of them Samsung, Dell, et al, use these temps in their manufacturing operations. That way when they want to lay off employees, the temp firm takes the unemployment hike, not them. Now connect the dots. The person of interest  got laid off as an employee of the temp firm. The temp firm hired said person  back, as a contract employee,ie, they are following the same pattern as the their client. 

Okay so where is this going?  If we can outsource US tax returns to India, why not outsource CPA work to contract CPAs?  Accountemps does this already. Interestingly Robert Half, the accounting employment people, own that company. No doubt it provides temp help for folks asking Robert Half to find them a perm job, in the mean time….

Can you see where I am going with this?  How long before CPA firms or corporations decide to locally outsource the accounting work to the new CPA Temp Pool Provider?  That way the 

FICA, FUTA, SUTA, Medicare tax, Obamacare tax, WIT are all someone else's problem?  Defined Contribution plan, forget that!  As more cities fall by the wayside with Defined Benefit Plans I expect less and less of this in the future. 

Now that I think about it further, a CPA firm is nothing more than a group of CPAs offering services for an hourly fee. Even CPA firms have eliminated the traditional lavish corner office and use hoteling of cubicles to better manage space and costs. A few years back I read about someone starting a firm to do a specific kind of audit. The idea was to use empty nesters whose children had left home. These folks were looking for some work but not a full load. It seemed to work well both ways. I understadn that the founder of Pre paid Legal uses a lot of female lawyers who can work from home answering calls and take care of their children at the same time.

It's coming, you read it here first. My point, when you leave here are you prepared to 'go it alone' in this Brave New World.

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5 responses to “Where is Outsourcing Headed?”

  1. Steven Beeler Avatar
    Steven Beeler

    It is a scary time, and I have no doubt you are correct. There are too many pluses when a company weighs the pros and cons of outsourcing work, especially with the tax laws currently in place along with the long term obligations that often result of hiring full-time employees.
    Even in my industry, pharmaceutical sales, many of the large pharma companies hire contract sales forces. By doing so it allows them to easily increase or decrease the number of representatives needed according to the number of products needed to promote. When the product pipeline dries up a bit, companies can simply cancel their contract with the company providing the outsourced sales force.

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  2. Tammy Salinas Avatar
    Tammy Salinas

    I agree, what are we coming to?? We are digging our own graves at the expense of..ironically not incurring FUTA, SUTA tax payables??!?!?!?!
    First it was CPAs, not Public Accounting….CPA’s are now driven to either Auditing or Tax type businesses. A few clients of mine that I do payroll for actually have individuals paid both as employees and being responsible for Bi-weekly / monthly tax deposits AND those same individuals would get paid as contract labor for other work. This is crazy. Sooner or later as you said, I think all this FUTA, SUTA and FICA will be avoided by many and then what??? Everyone for themselves?
    How is it that Canada can afford and offer medical to all their residents?? Dont they all have medical coverage without all the mess we have over here?

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  3. Dennis Elam Avatar
    Dennis Elam

    There should be a lot more critical thinking questions about canada versus the us, thank you,
    Canada is a much smaller country than the US with a much more homogeneous population
    Canada does not have 12 M illegal immigrants living among them that is half the entire population of Canada
    No country has ever tried to do this all at once except of the Soviet Union and we know how that turned out

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  4. Joy Avatar
    Joy

    The company I work for moved their incorporation from Bermuda to Switzerland to take advantage of the tax laws a couple of years ago and then early this year began outsourcing a lot of our work. When they did this they of course laid off many employees at our corporate office in Houston. They are not done yet, still more departments are going to loose U.S. employees and I am sure more layoffs to come. I have been told they will give me a promotion when I get my degree but will all the outsourcing not sure that will happen. Its all about the money and not about people. We need to start taking care of our own economy first.

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  5. Dennis Elam Avatar
    Dennis Elam

    We will be doing everything here at A & M to assist you in your goals.

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