Tag Archives: offshoring

Offshoring Personally Identifiable Information Outside of US Increases Concern Over Privacy and Identity Theft

A new California law due to take effect January 1, 2012 – Senate Bill 909 (SB 909) – appears to be one of the first in the nation that addresses the growing concerns over the controversial practice of “offshoring” personally identifiable information (PII) collected during background checks of job applicants by sending the data outside of United States and its territories and beyond the protection of U.S. privacy and identity theft laws. This is Trend Number 9 of the fifth annual Employment Screening Resources (ESR) ‘Top 10 Trends in Background Checks’ for 2012. To view the list of trends, visit http://www.esrcheck.com/ESR-Top-10-Trends-in-Background-Checks-for-2012.php. Continue reading

CALI To Host Free Webinar for Members November 29 on New California Laws Impacting Background Screening

The California Association of Licensed Investigators (CALI) Legislative Committee will host a free webinar for CALI members on Tuesday, November 29, 2011 from 2:00 PM to 3:25 PM Pacific Time featuring Attorney at Law Lester Rosen, the founder and CEO of Employment Screening Resources (ESR) and CALI member. The webinar will focus on two new California laws taking effect January 1, 2012 – Assembly Bill 22 (AB 22) and Senate Bill 909 (SB 909) – that will impact background screening for employment purposes. (NOTE: An archived version of the webinar “New California Laws Impacting Background Checks in 2012″ is available to CALI members at: http://www.cali-pi.org/news/78277/Nov-29-Webinar-by-Les-Rosen.htm). Continue reading

Lawsuit Alleges Offshoring of Call Center Services Outside US by Financial Institution Puts Customer Information at Risk

Alleging that the practice “offshoring” puts the financial information of customers at risk, a consumer class action lawsuit recently filed against the largest bank holding company in the United States (by assets) is challenging the financial industry’s standard business practice of offshore outsourcing – also known as “offshoring” – customer services to call centers located outside of the United States that are staffed with foreign nationals. Continue reading

Part 2 of 2011 ESR Background Check Trends Review: Offshoring PII and Workplace Violence Prevention

The second of five installments of the Employment Screening Resources (ESR) Background Check Trends of 2011 Review features the number eight trend, offshoring Personally Identifiable Information (PII) outside the U.S., and the number seven ranked background check trend of the year, workplace violence prevention. To view previous installments of the ESR Background Check Trends of 2011 Review, visit Part 1.

  • Number 8 ESR Background Check Trend for 2011: Increased Privacy Concerns Over Offshoring of Personally Identifiable Information (PII).
  • Number 7 ESR Background Check Trend for 2011: More Workplace Violence Prevention Education Helps Protect Employers and Employees.

Continue reading

New Data Confirms Trend of Outsourcing Jobs Outside of US with Offshoring Affects Unemployment

Adding to the debate over whether globalization negatively affects the U.S. economy, new data from the U.S. Commerce Department shows that multinational corporations in the United States – familiar big brand-name companies which employ nearly 20 percent of all American workers – reduced their domestic workforce by 2.9 million jobs during the last decade while at the same time increasing their overseas workforce by 2.4 million jobs, the Wall Street Journal reports in the article ‘Big U.S. Firms Shift Hiring Abroad.’ Continue reading

ESR Background Screening Trend 8 for 2011: Increased Privacy Concerns Over Offshoring of Personally Identifiable Information (PII)

By Lester Rosen, Employment Screening Resources (ESR) President & Thomas Ahearn, ESR News Editor

Employment Screening Resources (ESR) Fourth Annual ‘Top Ten Trends in Pre-Employment Background Screening’ for 2011

Trend No. 8: Increased Privacy Concerns Over Offshoring of Personally Identifiable Information (PII)

A new background screening trend emerging in 2011 will be the increased concern over the “offshoring” of Personally Identifiable Information (PII) of U.S. consumers.

A recently signed California law appears to be the first in the United States to regulate the “offshoring” of Personally Identifiable Information (PII) of U.S. consumers collected for background checks, a controversial practice where private data of U.S. citizens – such as names, dates of birth, addresses, and Social Security numbers (SSNs) – is sent overseas, outside the United States and its territories, and beyond the reach of U.S. privacy laws.

In September 2010, Governor Arnold Schwarzenegger signed into law California Senate Bill 909 (SB 909), which addresses the issue of personal information being sent offshore. SB 909 – which takes effect January 1, 2012 to allow time for background check firms to provide new releases to employers or modify online language – amends the California Investigative Consumer Reporting Agencies Act (ICRA) that regulates background checks in California and requires that a consumer must be notified as part of a disclosure before the background check of the web address for “information about the investigative reporting agency’s privacy practices, including whether the consumer’s personal information will be sent outside the United States or its territories.” In addition:

  • If a background check company does not have a web site, then the background check company must provide the consumer with a phone number where the consumer can obtain the same information.
  • The background check company’s privacy policy must contain “information describing its privacy practices with respect to its preparation and processing of investigative consumer reports.”
  • Background check companies in California (and firms that do business in California) must have a statement in their privacy policy entitled “Personal Information Disclosure: United States or Overseas” that indicates whether the personal information will be transferred to third parties outside the United States or its territories through the process of offshoring.
  • “Third parties” are defined in SB-909 as including, “but not being limited to, a contractor, foreign affiliate, wholly owned entity, or an employee of the investigative consumer reporting agency” and also requires a “separate section that includes the name, mailing address, e-mail address, and telephone number of the investigative consumer reporting agency representatives who can assist a consumer with additional information regarding the investigative consumer reporting agency’s privacy practices or policies in the event of a compromise of his or her information.”
  • In the event a consumer is harmed by virtue of a background check company negligently sending data offshore, SB-909 provides for damages to the consumer.

The practice of offshoring – whether personal information or jobs – can have a negative impact on network security since, for all intents and purposes, once Personally Identifiable Information (PII) is sent offshore outside the U.S. it is beyond the reach and protection of U.S. laws in cases involving identity theft or privacy issues. As reported earlier on ESR News, other states besides California have data privacy laws in effect, in legislation, or have voiced concerns over data privacy. For example:

As for the definition of Personally Identifiable Information (PII), the following are often used for the express purpose of distinguishing individual identity, and thus are clearly PII under the definition used by the U.S. Office of Management and Budget:

  • Full name
  • Birthday
  • Birthplace
  • Social Security Number (SSN)
  • Vehicle registration plate
  • Driver’s license number
  • Credit card number
  • National identification number
  • IP ( Internet Protocol) address
  • Face, fingerprints, or handwriting
  • Digital identity
  • Genetic information

In addition, according to a 2009 security survey of 350 network administrators and IT executives executed by Amplitude Research and commissioned by VanDyke Software, offshoring of Information Technology (IT) jobs can lead to increases in data breaches. The survey more than two-thirds (69 percent) of respondents felt outsourcing technical jobs offshore had a negative impact on network security, and 61 percent of workers at companies outsourcing IT jobs said their company had experienced a data breach.

The security survey naturally raises questions as to the safety of offshoring Personally Identifiable Information (PII) of American job applicants in order to prepare background checks. ConcernedCRAs, a group of more than 120 Consumer Reporting Agencies (CRAs), opposes the practice of offshoring Personally Identifiable Information (PII) of U.S. citizens outside the country to be processed beyond U.S. privacy laws.

A member of ConcernedCRAs, Employment Screening Resources (ESR) does not offshore Personally Identifiable Information (PII) and all domestic background checks are performed exclusively in the United States. ESR does all processing and preparation in the U.S. in order to protect applicants and employers, the only exception being when performing an international verification using information residing outside the U.S. ESR was also the third U.S. background screening firm to become “Safe Harbor” Certified for data privacy protection. See: https://safeharbor.export.gov/companyinfo.aspx?id=9239.

Before selecting a U.S. background check firm, employers should determine if that firm is processing information outside of the country. The risk is significant, even if the offshore facility is wholly owned or a subsidiary of a U.S. firm. An employer needs to have a full understanding of how data and privacy is protected once it leaves the U.S., and what duty is owed to job applicants in terms of notice that their PII is being sent abroad.

To read more about ‘Offshoring’ and ‘Personally Identifiable Information’ on ESR News, visit articles tagged at http://www.esrcheck.com/wordpress/tag/offshoring/ and http://www.esrcheck.com/wordpress/tag/personally-identifiable-information/.

Employment Screening Resources (ESR) is releasing the ESR Fourth Annual ‘Top Ten Trends in Pre-Employment Background Screening’ for 2011 throughout December. This is the Eighth of the Top Ten Trends ESR will be tracking in 2011. To see an updated list of ESR’s ‘Top Ten Trends in Pre-Employment Background Screening’ for 2011, visit: http://www.esrcheck.com/Top-Ten-Trends-In-Background-Screening-2011.php.  

Founded in 1996 in the San Francisco Bay area, Employment Screening Resources (ESR) is the company that wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen. Employment Screening Resources is accredited by The National Association of Professional Background Screeners (NAPBS®) Background Screening Credentialing Council (BSCC) for proving compliance with the Background Screening Agency Accreditation Program (BSAAP). ESR was the third U.S. background check firm to be Safe Harbor’ Certified for data privacy protection. To learn more, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations, at 415.898.0044 or jcallahan@ESRcheck.com.

New CA Law Regulates Offshoring Personally Identifiable Information (PII) of Consumers Used in Background Checks

By Thomas Ahearn, ESR News Editor

A recently signed California law appears to be the first in the United States to regulate the “offshoring” of Personally Identifiable Information (PII) of U.S. consumers used during background checks – such as names, dates of birth, addresses, Social Security numbers (SSNs), and financial data – overseas and outside the U.S. and its territories.

In September 2010, Governor Arnold Schwarzenegger signed into law California Senate Bill 909 (SB 909), which addresses the issue of personal information being sent offshore. SB 909 – which takes effect January 1, 2012 to allow time for background check companies to provide new releases to employers or modify online language – amends the California Investigative Consumer Reporting Agencies Act (ICRA) that regulates background checks in California and requires that a consumer must be notified as part of a disclosure before the background check of the web address for “information about the investigative reporting agency’s privacy practices, including whether the consumer’s personal information will be sent outside the United States or its territories.”

If a background check company does not have a web site, then the background check company must provide the consumer with a phone number where the consumer can obtain the same information. In addition, the background check company’s privacy policy must contain “information describing its privacy practices with respect to its preparation and processing of investigative consumer reports.” Specifically, background check companies in California (and firms that do business in California) must have a statement in their privacy policy entitled “Personal Information Disclosure: United States or Overseas” that indicates whether the personal information will be transferred to third parties outside the United States or its territories through the process of offshoring.

SB-909 defines “third parties” as including, “but not being limited to, a contractor, foreign affiliate, wholly owned entity, or an employee of the investigative consumer reporting agency” and also requires a “separate section that includes the name, mailing address, e-mail address, and telephone number of the investigative consumer reporting agency representatives who can assist a consumer with additional information regarding the investigative consumer reporting agency’s privacy practices or policies in the event of a compromise of his or her information.” In the event a consumer is harmed by virtue of a background check company negligently sending data offshore, SB-909  provides for damages to the consumer.

As reported earlier on ESR News, the practice of offshoring – whether personal information or jobs – can have a negative impact on network security since, for all intents and purposes, once personal information is sent offshore outside the U.S. it is beyond the reach and protection of U.S. laws in cases involving identity theft or privacy issues. Also, offshoring of Information Technology (IT) jobs can lead to increases in data breaches.

According to a 2009 security survey of 350 network administrators and IT executives executed by Amplitude Research and commissioned by VanDyke Software, more than two-thirds (69 percent) of respondents felt outsourcing technical jobs offshore had a negative impact on network security while only 9 percent felt it had a positive impact. In addition, the security survey found:

  • 25 percent of respondents in the survey belonged to companies that outsourced IT jobs to other countries.
  • Of these outsourcing firms, about half said their security had been negatively impacted and 61 percent said their company had experienced a data breach.
  • In contrast, only 35 percent of companies not outsourcing reported a data breach.

The security survey naturally raises questions as to the safety of sending Personally Identifiable Information (PII) of American job applicants offshore in order to prepare background checks. A group of more than 120 Consumer Reporting Agencies (CRAs) called ConcernedCRAs opposes the practice of offshoring Personally Identifiable Information (PII) of U.S. citizens outside the country to be processed beyond U.S. privacy laws.

A member of ConcernedCRAs, Employment Screening Resources (ESR) does not offshore Personally Identifiable Information (PII) and all domestic background checks are performed exclusively in the United States. ESR does all processing and preparation in the U.S. in order to protect applicants and employers, the only exception being when performing an international verification using information residing outside the U.S.

To read more about offshoring on ESR News, visit articles tagged ‘offshoring’ at: http://www.esrcheck.com/wordpress/tag/offshoring/.

To read California Senate Bill 909, visit: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0901-0950/sb_909_bill_20100929_chaptered.pdf.

Founded in 1996 in the San Francisco Bay area, Employment Screening Resources (ESR) is the company that wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen. Employment Screening Resources is recognized by The National Association of Professional Background Screeners (NAPBS®) as Background Screening Credentialing Council (BSCC) Accredited for proving compliance with the Background Screening Agency Accreditation Program (BSAAP). For more information about Employment Screening Resources, visit http://www.ESRcheck.com or contact Jared Callahan, ESR Director of Client Relations and Business Development, at 415.898.0044 or jcallahan@ESRcheck.com.

Ohio Governor Issues Executive Order Prohibiting Use of Public Funds for Practice of Offshore Outsourcing Known as Offshoring

By Thomas Ahearn, ESR News Blog

Ohio Governor Ted Strickland has issued an executive order that prohibits the expenditure of public funds for services provided offshore and beyond the boundaries of the United States and its territories – a practice known as Offshore Outsourcing or “Offshoring” – a move that is a reaction to public outcry after a El Salvadoran call center was used for Ohio’s appliance rebate program, according to a report on Cleveland.com.

A press release on the Office of the Governor website at Governor.Ohio.gov reveals that the state’s Department of Development awarded a $357,300 contract to a Texas-based service provider in March 2010 to assist with the agency’s implementation of the $11 million federal stimulus-funded appliance rebate program which rewarded consumers with federal stimulus dollars when they bought energy-efficient appliances.

Despite state procurement requirements designed to restrict service providers from using public funds for offshore labor – in particular, an Ohio Department of Administrative Services (DAS) directive that requires agencies to ask potential vendors to list all locations where the services will be performed – the contract was awarded to a company that practiced “offshoring” and used offshore labor.

The company in Texas never told state officials in Ohio it would use a foreign call center, and the state did not require the information with bids. State officials learned about the call center from an Ohio resident who asked a call center employee where the operation was located, according to the press release.

“Ohio’s policy has been – and must continue to be – that public funds should not be spent on services provided offshore,” Strickland states in the Executive Order.  “Throughout my Administration, procurement procedures have been in place that restrict the purchase of offshore services.”

In June 2008, Strickland signed an executive order (E.O. 2008-12S) that implemented Think Ohio First practices promoting economic development by maximizing the use of Ohio businesses when agencies conduct purchases. 

The full text of the governor’s Executive Order 2010-09S “Banning the Expenditure of Public Funds for Offshore Services” appears in the press release:

  • 1. Ohio’s Economic Vitality Necessitates Constant Vigilance in State Job Creation Efforts.  State officials and employees must at all times remain passionately focused on initiatives that will create and retain jobs in the United States in general and in Ohio, in particular, and must do so especially during Ohio’s continuing efforts to recover from the recent global recession.
  • 2. No Public Funds Should be Spent on Services Provided Offshore.  Allowing public funds to pay for offshore services undermines economic development objectives and any such offshore services carry unacceptable quality and security risks. a. The Purchase of Offshore Services with Public Funds Undermines Economic Development and Other Job Creation and Retention Objectives.  The expenditure of public funds for services provided offshore deprives Ohioans and other Americans critical employment opportunities.  It also undermines efforts to attract businesses to Ohio and retain them in Ohio, initiatives in which the State has invested heavily. b. The Purchase of Offshore Services Has Unacceptable Business Consequences.   The use of offshore service providers could pose unacceptable data security, and thus privacy and identity theft risks.  There are pervasive service delivery problems with offshore providers, including dissatisfaction with the quality of their services and with the fact that services are being provided offshore.  It is difficult and expensive to detect illegal activity and contract violations and to pursue legal recourse for poor performance or data security violations.  The State’s use of offshore service providers ill-serves the people of Ohio who are the primary consumers of the services provided by the State.
  • 3. Ohio’s Policy Has Been – and Must Continue To Be – That Public Funds Should Not Be Spent on Services Provided Offshore. Throughout my Administration, procurement procedures have been in place that restrict the purchase of offshore services.  Despite these requirements, federal stimulus funds were recently used to purchase services from a domestic company which ultimately provided some of those services offshore.  This incident was unacceptable and has caused me, through this Order, to redouble my commitment to ensure that public funds are not expended for offshore services.
  • 4. Additional Steps Will Ensure that Public Funds Are Not Spent on Services Provided Offshore.  In order to ensure that the State of Ohio makes no expenditures for services provided offshore, I hereby order the following: a. No Cabinet Agency, Board or Commission (Executive Agency) shall enter into any contract which uses any funds within its control to purchase services which will be provided outside the United States.  This Order applies to all funds in the custody of an Executive Agency, be they from state, federal, philanthropic or private sources.  It applies to all purchases of service made directly by an Executive Agency and services provided by sub-contractors of those providing services purchased by an Executive Agency. b. This Executive Order will be personally provided, by the Director, Chair or other chief executive official of each Executive Agency, to the Chief Procurement Officer or other individual at that entity responsible for contracts for services. c. The Department of Administrative Services, through Ohio’s Chief Procurement Officer (OCPO), shall have in place, by August 31, 2010, procedures to ensure all of the following: i. All agency procurement officers, or the person with equivalent duties at each Executive Agency (APOs), have standard language in all Executive Agency contracts which: (a) Reflect this Order’s prohibition on the purchase of offshore services. (b) Require service providers or prospective service providers to: (i) Affirm that they understand and will abide by the requirements of this Order. (ii) Disclose the location(s) where all services will be performed by any contractor or subcontractor. (iii) Disclose the locations(s) where any state data associated with any of the services they are providing, or seek to provide, will be accessed, tested, maintained, backed-up or stored. (iv) Disclose any shift in the location of any services being provided by the contractor or any subcontractor. (v) Disclose the principal location of business for the contractor and all subcontractors who are supplying services to the state under the proposed contract. ii. All APOs are ensuring that all quotations, statements of work, and other such proposals for services affirm this Order’s prohibition on the purchase of offshore services and include all of this Order’s disclosure requirements. (a) Any such proposal for services lacking the affirmation and disclosure requirements of this Order will not be considered. (b) Any such proposal where the performance of services is proposed to be provided at a location outside the United States by the contractor or any sub-contractor, will not be considered. iii. All procurement manuals, directives, policies, and procedures reflect the requirements of this Order. iv. All APOs have adequate training which addresses the terms of this Order.
  • 5. Exceptions.  Nothing in this Order is intended to contradict any state or federal law.  In addition, this Order does not apply to: a. Services necessary to support the efforts of the Department of Development Global Markets Division to attract jobs and business to the State of Ohio, including incidental services for the support of trade missions, payment of international staff, and services necessary for the operation of international offices. b. Academic, instructional, educational, research or other services necessary to support the international missions of Ohio’s public colleges and universities.
  • 6. I signed this Executive Order on August 6, 2010 in Columbus, Ohio and it will not expire unless rescinded.                                    

            Ted Strickland, Governor

Banning the practice of offshoring where public funds are concerned – like the governor of Ohio issuing an executive order prohibiting use of public funds for outsourcing – may seem like a no brainer to many, but according to a blog on The Economic Populist the use of taxpayer dollars to offshore outsource jobs happens every day, from food stamp and unemployment support to large software design projects.

The Economic Populist blog also notes that as a result of the State awarding a stimulus contract to support the appliance rebate program to a contractor that practiced offshoring, workers in El Salvador were able to come into contact with the personal and sensitive financial data – also known as Personally Identifiable Information (PII) – of people from Ohio.

The controversial practice of “offshoring” has come to the attention of other states as well. As reported earlier on the ESR News Blog, California Governor Arnold Schwarzenegger recently signed into law California Senate Bill 909 (SB 909), which appears to be the first law in the nation that addresses the issue of personal information being sent offshore outside the United States or its territories.

SB 909 amends the California Investigative Consumer Reporting Agencies Act (ICRA) that regulates background checks in California and requires that a consumer must be notified as part of a disclosure before the background check of the web address where a consumer “may find information about the investigative reporting agency’s privacy practices, including whether the consumer’s personal information will be sent outside the United States or its territories.”

While SB 909 does not prohibit offshoring when it comes to background checks, the law will require a disclosure in the privacy statement of the background check firm’s website, as well as a link to that privacy statement.

Employment Screening Resources (ESR) does not offshore information contained in background check reports and is a member of Concerned CRAs, a group of Consumer Reporting Agencies (CRAs) that oppose the practice of offshoring information of U.S. citizens outside the country.

For more information, visit the ESR News Blog articles tagged “offshoring” at http://www.esrcheck.com/wordpress/tag/offshoring/.

Employment Screening Resources (ESR) is the company that wrote the book on background checks with ‘The Safe Hiring Manual’ by ESR founder and President Lester Rosen. ESR is recognized as Background Screening Credentialing Council (BSCC) Accredited by the National Association of Professional Background Screeners (NAPBS®) for proving compliance with the Background Screening Agency Accreditation Program (BSAAP). For more information about Employment Screening Resources, visit http://www.ESRcheck.com.

Sources:
http://governor.ohio.gov/Default.aspx?tabid=1753
http://www.cleveland.com/business/index.ssf/2010/08/no_public_funds_for_outsourcin.html
http://www.economicpopulist.org/content/ohio-bans-use-public-funds-offshore-outsourcing
http://www.concernedcras.com/no_offshoring.htm
http://www.esrcheck.com/wordpress/2010/09/30/hot-off-the-press-new-california-law-on-background-checks-appears-to-be-first-law-in-u-s-to-regulate-offshoring-of-personal-data-overseas/

New California Law on Background Checks Appears to be First Law in U.S. to Regulate Offshoring of Personal Data Overseas

By Thomas Ahearn, ESR News Blog

On September 29, 2010, Governor Arnold Schwarzenegger signed into law California Senate Bill 909 (SB 909), which appears to be the first law in the nation that addresses the issue of “offshoring” where the personal information of American consumers in sent offshore and outside the United States of its territories.

Authored by State Senator Rod Wright (D – Inglewood), SB 909 amends the California Investigative Consumer Reporting Agencies Act (ICRAA) that regulates background checks in California. The bill requires that a consumer must be notified as part of a disclosure before the background check of the web address where a consumer “may find information about the investigative reporting agency’s privacy practices, including whether the consumer’s personal information will be sent outside the United States or its territories.”

If a background screening firm does not have a web site, then the background screening firm must provide the consumer a phone number where the consumer can obtain the same information. The background screening firm’s privacy policy must contain “information describing its privacy practices with respect to its preparation and processing of investigative consumer reports.”

Specifically, SB 909 requires that background screening firms in California (and firms that do business in California) must have a statement in their privacy policy entitled “Personal Information Disclosure: United States or Overseas” that indicates whether the personal information will be transferred to third parties outside the United States or its territories.

SH 909 defines “third parties” as including, “but not being limited to, a contractor, foreign affiliate, wholly owned entity, or an employee of the investigative consumer reporting agency.” The bill also requires a “separate section that includes the name, mailing address, e-mail address, and telephone number of the investigative consumer reporting agency representatives who can assist a consumer with additional information regarding the investigative consumer reporting agency’s privacy practices or policies in the event of a compromise of his or her information.”

In the event a consumer is harmed by virtue of a background screening firm negligently sending data offshore, the bill provides for damages to the consumer.

SB 909 takes effect January 1, 2012.  This will presumably allow time for background screening firms to provide new releases to employers, or to modify the language on online systems. The full text is available at: http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0901-0950/sb_909_bill_20100929_chaptered.pdf.

ESR Does Not Offshore

Employment Screening Resources (ESR) does not offshore personal data, and all domestic background checks are performed exclusively in the United States. ESR will provide more a detailed analysis of this new law in upcoming blogs. For more information about background checks, visit http://www.esrcheck.com/.

Sources:
http://gov.ca.gov/press-release/16089/
http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0901-0950/sb_909_bill_20100929_chaptered.pdf

New Twist on Outsourcing in Japan: Sending Workers Offshore to Cheaper Locations

By Lester Rosen, ESR President

In a number of blogs, Employment Screening Resources (ESR) has discussed why employer should very carefully consider the dangers of utilizing an employment screening process that sends applicant data off-shore for processing.  Such a practice puts the employer at risk.  Making Personal and Identifiable Information (PII) available to off-shore operator beyond the reach of U.S. privacy laws is a completely unnecessary risk, not to mention the lack of quality control and standards.

In a new twist on off shoring, the global edition of the New York Times reported on July 22, 2010 that Japanese companies are trying to save money by off shoring Japanese workers to cheaper locations in Asia.  Some Japanese firms have found that they cannot use foreign Japanese speakers because the service quality does not match customer expectations, and even foreign workers with a good command of the Japanese language may not understand the nuisances of politeness and manners of Japanese customers.

Although the wages are lower for Japanese workers that allow themselves to be outsourced and off shored, the lower cost of living may allow worker to save money and provide an interesting experience.

It appears that U.S. firms that off shore to foreign countries have also found that even though foreign English speakers are cheaper, the customer experience may often be lacking.  Partly for that reason, many U.S. firms have brought call center work back to the U.S.

ESR does NOT send U. S. applicant information outside of the U.S. for processing.  Once data leaves the U.S., the data is beyond the reach of U.S. privacy laws and there is a lack of privacy protections.  Sending data outside the U.S. put applicants and employers at great risk with no meaningful upside for employers.  As a practical matter, someone in the U.S. has no ability to hire a lawyer in a foreign country to pursue legal action or contact a foreign police authority to get any action taken if their identity of PII is compromised.  The only exception is where ESR is asked to perform an international verification and the information resides outside of the U.S. Even in that situation, ESR goes to great length to protect applicant data by going directly to the school or employer.  If it is necessary to have a researcher do research in a foreign country, ESR only releases the minimum information absolutely necessary.

A large number of screening firms have also taken a position against off shoring data.  See:  http://www.concernedcras.com/no_offshoring.htm.

For more information on background checks and outsourcing, visit Employment Screening Resources (ESR) at http://www.esrcheck.com.

Source:

http://www.nytimes.com/2010/07/22/business/global/22outsource.html