A Recap of Benefits

• Homesourcing provides significant savings in regards to capital investment, since a firm does not need to maintain structures like office buildings and parking lots. JetBlue saves over $2000 annually in rent costs per employee ("Call Centers" 14-15).



• Considering that 75% of homesourced employees have some college education, it is not surprising that homesourced employees are 30% more productive than their peers; resulting in average sales that are 25% higher (Friedman 36-38).



• Homesourced workers are less likely to quit, leading to a 3.5% turnover rate at JetBlue versus an industry average of 65%. With each lost employee, the firm must spend over $9000 to replace them, making each retained employee a valuable asset (Keating D1).

A Recap of Costs

• Without a manager close at hand to supervise, shirking on the job can be a serious problem for the virtual work environment of homesourcing. The large gains from productivity can quickly erode in the presence of widespread shirking (Pindyck 636-637).



• Isolation and detachment from one’s employer are difficult problems that arise when working for most large employers, but these problems are even more dangerous for the homesourced employee of a large firm. With productivity vital, workers need to remain content and engaged (Autor1169-1210).

Conclusion

As with any new innovation, there are a series of benefits and opportunities countered by a series of costs and added difficulties, and homesourcing is no exception. Through the specific analysis of JetBlue, it is evident that homesourcing can provide cost savings through reduced capital investment, increased productivity through employee contentment, and lower costs from reduced turnover. At the same time, homesourcing can cause increased worker isolation and shirking. Yet, after a careful review of costs and benefits, it is apparent that the benefits of homesourcing far exceed its costs, when prudent measures are taken to control costs. Ultimately, homesourcing appears to be a profitable enterprise when effectively managed. It is important for any future entrepreneur or businessperson interested in homesourcing to fully understand the full complexities and costs of this new and innovative system.

The Future

Homesourcing will be increasingly used in the future as more and more businesses take advantage of the lowered costs, increased productivity, and reduced turnover that it offers. With the demand for homesourcing likely to increase, it is important that a supply of labor exists to meet this demand. Several current trends affecting the U.S. work force will likely help in the creation of the needed labor pool for this growing movement.

• Baby Boomers: 77 million baby boomers will begin to retire in the near future, dramatically changing the labor pool. But with boomers living longer, many will seek additional retirement funds through part time work. Working from home will be especially enticing for seniors looking for part time work (Keating D1).



• Anti-Trade Liberalization: After the U.S.’s rejection of the CNOOC and Dubai Ports World deals along with the strained Doha round of trade talks, it appears that trade liberalization, especially in regards to services (e.g. outsourcing), efforts are stalling at present. Instead of shipping service jobs overseas, companies may find it more politically palatable to homesource jobs (Shellenbarger R12).



• Dual Incomes: Military spouses caring for children are increasingly turning to part time work to supplement their household incomes. With over 100,000 troops stationed in Iraq and Afghanistan, it seems likely that military spouses will play an important role in the part time labor force for years to come ("Call Centers" 14).