This Week's Herman Trend Alert Demand-Driven Workforce Development

The Herman Trend Alert March 7, 2007 Don't Offshore, Lakeshore A fact of corporate life is that there is constant pressure to "beat yesterday," to increase corporate earnings, and push more profit to the bottom line. In their drive to increase profits, many organizations have resorted to outsourcing outside of their home countries. We call that "offshoring" and for years, The Herman Group has been sounding the alarm that, in most cases, the savings from offshoring are simply "not worth the effort." Recently, Joyce learned of an extraordinary United States company that faced this issue and rather than offshoring, they decided to "lakeshore." Lakeshoring means outsourcing to another organization within the home country. Sedgwick CMS, one of the few organizations to earn the Employer of Choice® designation for three years in a row, embraced this seemingly counterintuitive idea. When Sedgwick faced the choice, "to offshore or not to offshore" their claims processing unit, unlike its major competitors, its enlightened CEO David North made the executive decision that they would not. Instead, he charged his troops with finding a location within the United States where there was an available workforce with significantly lower costs. The result: the "Lakeshore Project," including their facility in Dubuque, Iowa. The Lakeshore Project, providing "jobs, training and modest salaries for employees in small communities throughout the country, has led to savings for customers," North said. The real payoff for the company is in lower employee turnover, thus providing a higher continuity of service and bottom line savings. In fact, in the first six months of the program, the company did not lose one employee at the new facility. In 2004 by Minnesota’s Northeast Higher Education District coined the term to promote its tech-prep graduates. Called the "True North" initiative, this program, using federal funds, encourages companies to locate in the region. Lakeshoring avoids many of the challenges associated with offshoring: language and cultural differences, quality control, resentful domestic employees (though Sedgwick calls them "colleagues"), shrinking salary differentials, high turnover, deficient infrastructure, and even the loss of social capital. Our forecast: in the years ahead more organizations, large and small, will resort to lakeshoring, rather than offshoring. © Copyright 1998-2008 by The Herman Group, Inc. -- reproduction for publication is encouraged, with the following attribution: From "The Herman Trend Alert," by Roger Herman and Joyce Gioia, Strategic Business Futurists. (800) 227-3566 or http://www.hermangroup.com. The Herman Trend Alert is a trademark of The Herman Group, Inc." DON'T BE LEFT BEHIND! If you've been thinking about attending our valuable Employee Retention Specialist Certificate Program, don't delay--only three spaces remain. With the employment market heating up, many positions are literally impossible to fill. Attend this course and you will learn dozens of low-/no-cost valuable strategies to attract and retain the talent you need. Recertification credit from HRCI. Next program: May 22-23, Charleston, SC. Call Carol at 336-282-9370 or visit http://www.employeeretentionspecialist.com. GET INSIDE THE MINDS OF YOUR EMPLOYEES Find out what's really going on inside the hearts and minds of your employees. Our InnerViews interviewing service uses SPHRs and PHRs, certified human resource professionals to probe for the information you really need to know. Exit and Stay Interviews, as well as Why-Didn't-You-Take-Our-Offer Interviews. Call Rosalie Catalano at 937-648-1918 or read more at: http://www.hermangroup.com/retentionconnection/exit_interviews.html. NEW BABY BONUS Book Joyce to speak on the West Coast in 2008 and receive 100 of her books of your choosing. There is a new baby in the family, Spencer Jay, and Joyce would appreciate more opportunities to watch him grow. For more about Joyce, visit http://www.hermangroup.com/joyce.html or call Joyce at 336-210-3548. Herman Trend Alerts are produced by the Herman Group, strategic business futurists, Certified Management Consultants, authors, and professional speakers. New subscribers are welcome. There is no charge for this public service. The Herman Trend Alert is received by over 30,000 subscribers in 78 countries, in addition to other websites and printed magazines. Do you enjoy receiving this weekly e-mail update? Contact us about our co-branded Trend Alert service. Click here to sign up for the Herman Trend Alert. Subscribe or Unsubscribe to weekly Herman Trend Alert View this week's Herman Trend Alert Archived Weekly Herman Trend Alerts

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