Today's business and competitive environment, calls for innovations and new strategies to remain valuable in the market. Outsourcing labour is a practice carried out where a company hires another company or an individual to carry out tasks, operations or handle certain services that are executed or have been previously handled by in-house department or company's own employees. Outsourcing is something that has been trending in the past few years and it is still being debated on if it is ethically correct to outsource labour especially from foreign countries (Taylor 367). This essay provides insights on outsourcing in the world. It describes why the approach has been adopted and how it is implemented in the modern in our daily life. Further, the paper provides analysis of the various limitations and the advantages associated with outsourcing. Thus, the paper is critical in providing an understanding of the concept of outsourcing.
Many companies these days have gone for the option of outsourcing labour and just for the economic reasons. It has become a controversial issue because companies outsource to maintain or increase competition. Companies outsource the people with the best qualities. It has become easier for companies to outsource because, of the low wages in other countries. Kearney study also showed that outsourcing has increased because Western countries especially the United States and German have poor performance in mathematical, scientific and reading related fields. India is one of the countries that is experiencing outsourcing of labour (Devraj). Therefore, the practice of outsourcing has been adopted on the entire globe.
Before an organization comes up with the decision of outsourcing, it has to consider the advantages and disadvantages. When outsourcing is done, is because the organizations wish to benefit from it. Outsourcing, in general, affects people, the community and the organization, therefore before outsourcing an organization has to consider its effects on the economy and the people around. Even if it is done through the modern technology where people can work for one organization while being away from it, an organization should be considerate.
Benefits of outsourcing
Cost reduction is the main reason why companies consider outsourcing. People would not outsource if there are no savings made. There are those tasks that are performed by company employees they are more costly than if they are performed by another person. One way of saving money through outsourcing is that organizations do not have to pay for transport or training instead one can work from where they are. For example, if an organization requires a website to be created for a certain service, instead of training their employee, they will use another person from another company to do it for them and pay them even less. An employee will have to be trained first before creating the website. Therefore someone that is hired will accomplish the job faster and cost-effectively (Weidenbaum 24). The convenience created from outsourcing has been a major driver of its acceptability on the entire globe.
Outsourcing gives organizations opportunities. Companies are presented with opportunities to increase competitive global marketplace. A company can provide 24/7 coverage especially for consumers who want to be served all the time. The quality of products can be improved and therefore the production cost can be lowered and sales increased hence earning more for the company. Division of labour is also increased and the products can be easily produced and sold. For example, there are those products to be sold in another country instead of moving the others in the other country can be received by those in there. A product from the US to India can be received by those in India (Devraj).
The company can gain perspective of seeing the importance of domestic and international services. Because of the current changing trends around the world, the company can learn from other people on new technologies and how they can be used. Most companies want to focus on their competence in production and offering of services. Through outsourcing, competence is enhanced. There is also a possibility of accessing latest production technologies and equipment and not necessarily by purchasing or maintaining the equipment. When good outsourcing is done and good relationships maintained, it is also easy to access business partners that can bring in more opportunities from their companies (Taylor 367).
Due to outsourcing, companies get to be more competitive and hence most employees of the company get to keep their jobs. Better or new jobs are created because of companies enhancing their financial strengths. An example is when companies upgrade their software systems, the domestic demand for programmers reduces but higher paid system integrators are needed. Due to fewer costs, new equipment is brought in and training programs expanded. Also, the US has been able to create more jobs than Europe and Japan because of outsourcing (Taylor 367).
In the US economy, outsourcing leads to dislocation of workers and resources, but this does not lead to a negative impact because the dislocated workers must find new opportunities somewhere else in the economy. When they look for other opportunities, the economy increases. Outsourcing is not viewed as something that leads to more competition but instead, something that supplements the tasks of most of the American workers. Therefore, outsourcing benefits both the companies and the economy at large.
Limitations of outsourcing
A company that carries out the act of outsourcing because other companies are doing it, they might be in for a shock. People like to do things that their competitors are doing. There come costs and complications of outsourcing. For example transportation costs where one has to travel to several places before settling down. Sometimes terminations of the outsourcing arrangement occur, if this happens, then there is a lot of time that could have been wasted and money that was invested in it (Weidenbaum 24). Therefore a firm should be prepared financially and also have the right reasons for outsourcing to be a success.
Outsourcing can lead to low quality and brand damaging of products. Someone that is new to the business may not have full information on what is usually done. Therefore, clients may start to notice a difference in products and ones a great product may be suddenly viewed as crappy. For example, there may be unreliable suppliers that put aside their work when they get more important clients and they go for those ones and they forget the others. If other employers also feel that the company is doing a lot of outsourcing they may quit their jobs when they get more desirable companies as they feel more appreciated.
Outsourcing makes the company's employees lose their jobs, or they are shifted to less desirable workplaces. People who get demoted, get to lose their dignity. Some people work hard all their lives just to get a job, and when it is lost, it becomes hard for them to even put food on the table for their families. When a company does outsourcing, it is difficult for the company to provide enough services to those people that their jobs have been outsourced (Weidenbaum 24).
Conclusion
Outsourcing has changed the ways in which different nations interact. It has also come with its own advantages and disadvantages. Before a company does outsourcing, it should look at the reasons why it needs outsourcing. It should not go for it because others have gone for it because it may end up in problems. Reduction of costs should not be the main reason why a company carries out the act of outsourcing. It might later even be more expensive to than using the company employees. Outsourcing is of a great impact because of the trending changes in technology. If someone is outsourced to work for another company in their country, then it is an added advantage to the company. Hence, outsourcing can also be something that motivates other people to work harder.
Works Cited
Devraj, Ranjit. "India: Job Outsourcing Thrives Despite Criticism in the U.S." SIRS Issues Researcher, 08 Apr, 2004, https://sks-sirs-com.riohondo.idm.oclc.org. Accessed 13 April 2018
Taylor, Timothy. "In Defense of Outsourcing." Cato Journal Vol.25, No.2, 2005, pp. 367-377, SIRS Issues Researcher, https://sks-sirs-com.riohondo.idm.oclc.org. Accessed 13 April 2018
Weidenbaum, Murray. "Outsourcing: Pros and Cons." St. Croix Review Vol. XXXVII No.5, Oct, 2004, pp. 24-30, SIRS Issues Researcher, https://sks-sirs-com.riohondo.idm.oclc.org. Accessed 13 April 2018
