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By | Tim Worstall 14th February 2011 14:17

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.

And the process of editing and subbing goes on while those various editions are printed. It is not so much that the paper is tailored to a specific region (although Scottish versions of London-based newspapers are now routinely tailored in such a way), but rather that the news editors all have a good look at what their competitors have run in their first editions and then – well, let's be polite – report what the other papers are saying. It can be quite amusing if you've access to a selection of the different editions (or if you watch, overnight, the web pages changing), seeing how a scoop from one paper in those first editions becomes a story all over all of the papers by the time the London editions are printed.

The implication of this is, of course, that those doing the subediting are really having to work night shifts: certainly afternoon-to-night even if not fully graveyard shifts. Such working patterns imply a wage premium, one that can be cut by instead sending all of that work off to people who are working in the cold hard light of day, those in another time zone.

So while wages might be high – possibly even generally higher – in Australia than in the UK, by shifting work from night shifts to day, money can be saved. In this way, Australia's time zone becomes a competitive advantage. No doubt similar work could be outsourced from East Coast US papers and the like (if they were liberal enough to let go of that function, something the famously anal East Coast US papers are unlikely to relish).

But it has to be more than just wages in general which will make Oz an offshoring outpost, for wages in comparison just aren't low enough, in and of themselves, for it to be viable. The winning factor has to be something like our time zone example.

Kwality [sic] counts

There is also, of course, the issue of quality of the work done. And I don't mean to be rude or nasty, but following this particular paper's subbing errors has been something of a sport for me. For one friend (sadly now dead) was laid off from the Telegraph as a result of this offshoring and another has fled to The Times.

So, while many of these were later corrected, I have collected some ripe examples of what not to write: “an example of companies that are two dominant“, “Misues of personal data led to pensinoer’s death”, “Satellites to monitor cuontries for climate change“, as well as a couple of bad headlines – “Geatest Guitar Riffs Named” and “Sri Lankan Election: Warrior with the President in his Sites".

OK, accepted, these are simply typos and they were indeed corrected eventually. This type of error is simply evidence of people working quickly and online. However, we also find evidence of subeditors not being quite up-to-speed on matters English, which is something of a problem if one is subbing a newspaper for English people.

For example: “Horsemen take part in a Kok-boru, or goat grabbing, competition as part of celebrations to mark the spring equinox in Bishkek, the capital of Kyrgyzstan” might seem fair enough, for goat-grabbing is is indeed sometimes called Kok-boru (and is generally considered the ancestor of polo). However, in British English, we use another word, Bushkazi, to describe it.

Or have a look at this (now changed) photo caption written to accompany a report of famous English comedian Sir Norman Wisdom's death: “HRH the Queen meets Sir Norman Wisdom after the state opening of Isle of Wight Parliament Photo: PA”. There are three errors in that one sentence. Firstly, Sir Norman lived on the Isle of Man; secondly, the Isle of Wight doesn't have a Parliament (that's two errors in one); and it's HM (Her Majesty) the Queen, not HRH (Her Royal Highness, used for more minor female royals rather than queens).

This is a local shop for local people, there's nothing for you here

Friedrich Hayek's observation that much knowledge is local is one of the great problems of offshore editorial. I don't expect someone 12,000 miles away to have that sort of detailed knowledge of the strangenesses of English life: but it does seem odd to employ someone there whose job is to have such detailed knowledge.

We might even complain about more basic points such as this. Using a man's name five times in a piece and managing to spell it correctly only twice might be some sort of a record (although, to be fair, not an all-time record. One colleague once found eight errors of fact in just the first sentence of a Polly Toynbee piece).

I will admit that when I reviewed Professor Shiller's book for the same paper I got it wrong, but the subs back then did catch my error. Have a look at this teaser, now vanished into the archives: “Easter Island, Chile, and the South Pacific plunged into darkness.” Yes, they were talking about a solar eclipse, but that sort of vagueness (what, you mean we'll have to wait a whole 24 hours for nightfall to come again?) is what subs are supposed to root out.

And what are we to make of this quote from a Telegraph article on a penguin with melanism?

According to the Encyclopaedia Britannica, the condition is the darkness in an animal’s skin, feathers, or fur is (sic) acquired by populations living in an industrial region where the environment is soot-darkened. It can be gene related.

It does, however, mean that the probability that its members will survive and reproduce is enhance (sic).

The condition evolves over the course of several generations.

But due to being lighter in colour, they become more conspicuous to predators.

It isn't immediately apparent that the subeditors of that piece spoke English as a first language: possibly not even as a second or third. Especially when they've copied the bit about moths in industrial England, rather than melanin-enhanced penguins in Antarctica where soot pollution is unlikely to be an issue.

On the other hand, we do have the occasional example of the famed vibrancy of the Australian version of English. The headline (very sadly later changed) to accompany the story of the firing of Sir David Nutt was: "MPs demand answers over Nutt sacking".

But then no self-respecting subeditor could possibly have resisted trying that one on.

My point, by the way, is not that Oz-based subs are crap or terrible (even the worst of these mistakes is still miles ahead of what Private Eye claims The Guardian once managed, which was to render their own masthead as The Grauniad with the assistance of home-grown on-site subs), it's rather that what can be offshored needs to be examined carefully. It may well be true that time zones, wage differentials, a common language and the rest can be the basis of a successful business. Quality will have to be, as in any business adventure, strictly managed – and perhaps where detailed local knowledge is required, even that won't be enough.

One final point: Muphry's Law. This is the law which states that any piece either correcting errors or complaining of them will contain more and greater errors than those being corrected or complained of. Even if Tom were still around to sub this, Muphry's Law would still win out. ®

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