Full Facts: Outsourcing Jobs Overseas

On January 10, 2012, in Outsourcing, by Business Development Group

 

Delegation of mundane jobs to an outsourced company frees up domestic workers for other tasks, thereby increasing efficiency. If businesses delegates low-paying domestic jobs offshore, the money saved can go back into the company or increase the salaries of domestic workers employed by the company.

Delegation of mundane jobs to an outsourced company frees up domestic workers for other tasks, thereby increasing efficiency. If businesses delegates low-paying domestic jobs offshore, the money saved can go back into the company or increase the salaries of domestic workers employed by the company.

Outsourcing is a topic where there can be a lot of contention. For businesses, outsourcing offers several benefits, but domestic labor forces may see outsourcing as simply costing jobs. When examining outsourcing, it becomes clear that in addition to helping businesses, it also can be valuable to domestic laborers.

Outsourcing and offshoring is likely to intensify as new, less expensive collaborative technologies enter the scene and offer an increasing number of developing nations and small businesses an opportunity to participate in the global economy. Although the global economy is pervasive today, still, more than 80 percent of most small businesses still do business only at a local level, within their communities. Normally, only large, multinational corporations take advantage of the benefits the global economy has to offer. However, as information technology processes and legal barriers across borders continues to improve, this will change.

Variation

There are four basic types of outsourcing. The first is offshoring, in which a business outsources its employment or manufacturing needs to a company overseas. The second is nearshoring, when a company outsources its needs to a firm in a neighboring country. Subshoring is when a company actually sets up a part of its own business overseas and hires employees who work directly for the firm. The last is homeshoring, in which domestic workers fulfill company needs operating out of a different location than the main business.

Read related article: Outsourcing Organizational Capability Assessment

Increased Efficiency

An area where both the company and domestic labor might benefit is in increased efficiency. Delegation of mundane jobs to an outsourced company frees up domestic workers for other tasks, thereby increasing efficiency. If businesses delegates low-paying domestic jobs offshore, the money saved can go back into the company or increase the salaries of domestic workers employed by the company.

Read related article: Philippine Outsourcing: What is a BPO Virtual Captive?

Headstart

It is important to understand that there are some drawbacks to outsourcing. For example, jobs done overseas might not meet quality control standards domestically. However, by having representatives from the company oversee outsourced operations, this helps to ensure a high level of quality.

Read related article: BPO Real Time Outsourcing Customer Engagement – Giving your Customers More!

In-house or to Outsource? Know the difference!

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