Human capital management (can include Latest Mailing Database severance, outplacement, retention bonuses, "re-skilling" and hiring costs) · Legal fees (interpretation of the contract, third-party contracts, established vendor contracts if an interface is needed with the new provider) Latest Mailing Database· Technical costs (development/ integration costs to new interfaces, porting of code to new platforms) And CIOs must pay the prevailing home country hourly rate to offshore employees on temporary visas, so obviously there's no savings during that period Latest Mailing Database of time, which can take months. And the offshore employees have to work in parallel with similarly costly in-house employees for much of this time.
Basically, it's costing the company Latest Mailing Database double the price for each employee assigned to the outsourcing Latest Mailing Database arrangement (the offshore worker and the in-house trainer). In addition, neither the offshore nor in-house employee is producing anything during this training Latest Mailing Database period. During the transition, the offshore partner must put infrastructure in place. While the offshore partner incurs that expense, the customer should Latest Mailing Database monitor the process carefully. Often it can take longer than expected. Estimation: Expect to spend an additional 2 % to 3 % on transition costs. Hidden Costs of Transition Latest Mailing Database: The Cost of Layoffs - Laying off employees as a result of your offshore contract poses other sometimes unanticipated costs.
To begin with, you have to pay many of those workers severance and retention onuses. Layoffs can also cause major morale problems among Latest Mailing Database in-house "survivors," in some cases leading to disaffection and work slowdowns. Companies with experience in offshoring factor productivity dips and potential legal action from laid-off employees into the cost-benefit Latest Mailing Database analysis. %Estimation: Expect to pay an extra 3 % to 5 % on layoffs and related costs. The Cultural Cost - One of the biggest impediments to offshore savings is productivity.