Today’s individuals are familiar with outsourcing, but not all of them know the basic and details of that service. If you have an idea or plan to benefit from that kind of service, you may wonder to ask some questions as many business owners do in general.
1. What is outsourcing?
Outsourcing is the process of transferring the responsibilities of the workforce from the parent company to another company outside the parent company. Companies outside the parent company can be vendors, cooperatives or other agencies arranged under a particular agreement. Outsourcing in employment regulation can only cover the workforce in the support process or practically all work lines can be diverted as an outsourcing unit.
2. Why should there be outsourcing?
Outsourcing is often conceived as a corporate competition strategy to focus on its core business. But in practice outsourcing is generally driven by a company’s ‘greed’ to keep the cost down to the lowest and get the most profit that often violates business ethics.
3. Which companies practice outsourcing?
Almost all existing companies today have (and will continue to develop) their outsourcing lines. This trend is not only in labor-intensive enterprises (manufacturing, textile) but also high tech (telco, banking), to a large/small distribution company.
4. How are employee outsourcing trends?
Outsourcing often reduces the rights of employees that they should get if they become permanent employees (health, benefits, etc.). Outsourcing generally closes employee opportunities to permanent employees. Outsourcing position in addition to social vulnerability (jealousy among colleagues) is also pragmatically prone (job certainty, contract continuation, pension insurance)
5. Does outsourcing improve productivity?
In short-term, it can improve the productivity. Outsourcing is very effectively used in the new industry, high-risk investment and still operates in the experimental stage. In the long run: not necessarily.
6. Is the relationship of outsourcing with global competition?
Global competition, cheap laborers are often used as scapegoats for outsourcing practices. This condition is exacerbated by a merciless global capitalist with the jargon of productivity, efficiency and competitiveness jargon necessitated inevitably for a competing company to have a laborer with a low wage.