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Thread: Outsourcing

  1. #1
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    Outsourcing

    What do y'all think about outsourcing?

    I personally believe that it is and should be an acceptable way for a company to conduct their business.

  2. #2
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    Re: Outsourcing

    Many business owners in America do outsource some part of their administrative functions and have no problem doing so.

    Perhaps you might want to elaborate your OP. Are you talking about overseas outsourcing?
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  3. #3
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    Re: Outsourcing

    You generally can't do everything yourself so to outsource something is normal, exactly what depends. Outsourcing parts, raw materials and so forth is pretty normal. Very few companies make everything themselves, and in a sense power, water, security and many state services are all essentially outsourced.

    Generally however folks mean service labor such as customer support, human resources, or increasingly technical services like IT and software development.

    As a long time software developer I have the most experience with contract programmers and programming teams. Generally these are outsourced for one of two reasons: Cost, and startup time. Programmers outside the US are generally much cheaper and it takes a long time to hire and organize a large software team when contract houses have teams ready to go at a moments notice (more or less). Both can work, but both can have some serious down sides. I too often found companies think they can hire contractors, talk to them over the phone a few times and expect to get great software delivered. That is just a huge waste of money rather than a savings. You have to communicate with contractors more than an internal team, not less. It's not a magic solution as many executives imagine it is or are told it is by unscrupulous contract companies.

    ---------- Post added at 09:43 PM ---------- Previous post was at 08:01 PM ----------

    You generally can't do everything yourself so to outsource something is normal, exactly what depends. Outsourcing parts, raw materials and so forth is pretty normal. Very few companies make everything themselves, and in a sense power, water, security and many state services are all essentially outsourced.

    Generally however folks mean service labor such as customer support, human resources, or increasingly technical services like IT and software development.

    As a long time software developer I have the most experience with contract programmers and programming teams. Generally these are outsourced for one of two reasons: Cost, and startup time. Programmers outside the US are generally much cheaper and it takes a long time to hire and organize a large software team when contract houses have teams ready to go at a moments notice (more or less). Both can work, but both can have some serious down sides. I too often found companies think they can hire contractors, talk to them over the phone a few times and expect to get great software delivered. That is just a huge waste of money rather than a savings. You have to communicate with contractors more than an internal team, not less. It's not a magic solution as many executives imagine it is or are told it is by unscrupulous contract companies.
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  4. #4
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    Re: Outsourcing

    Outsourcing is just hiring people from outside the company. There is nothing inherently wrong with this. This practice can (and should) raise red flags when companies lay off large groups of workers and outsource labor from other countries. What we cannot do is separate the regulatory and labor policies from the decisions that organizations make in order to maximize profit. A company is not attempting to outsource in order to harm a group of workers nor to benefit another. They are doing it because the organization believes labor is costing too much money.

    That is not to say the organization is always correct. They may have an unreasonable expectation of labor and production. However, there is a real penalty when regulations result in higher labor costs. If labor begins to cost more than their production warrants, this is a real problem. So, it is obvious that a company will look overseas where labor can come cheap. Even a minimum wage laborer costs more than minimum wage to maintain due to government regulations. Healthcare. Benefits. Time off. The more requirements put upon businesses to hire an individual, then the less likely it is that the individual will produce enough to warrant his employment. If McDonalds has to pay $15/hr to flip burgers and press buttons on a register, how many burgers will McDonalds have to sell? If we make McDonalds pay for sick time/vacation time/family leave, then the worker is making much more than $15/hr. How many more burgers must be sold to justify his costs? What about regulations which force the company to hire lawyers and fill out paperwork to comply with various local, state, and federal agencies? How much additional cost do those things add per worker? So, when a company decides that labor for a particular job is just too expensive, then outsourcing is often a reasonable solution. So, McDonalds may contract out for janitorial services. They may contract out for certain customer service positions. They may lay off a large section of their IT team and outsource it. After all, these decisions don't just effect minimum wage/low-skilled workers. They hammer workers at all levels.

    So, it is not that all regulations or rules are bad, but they all have costs. And we cannot truly be outraged at outsourcing if we do not pick our rules and regulations with a little more frugality.
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  5. #5
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    Re: Outsourcing

    The reason for the outsource is the obvious debate here. I'm assuming you're speaking of Americas addiction to outsourcing to countries with lower business standards and less pay because they are Greedy and want to use countries corruption toward their goal of ruling the market which is clearly what they are doing seeing as the corporate rule is same as always in the retail industry.

  6. #6
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    Re: Outsourcing

    America is an expensive place to do business. It is the only nation that taxes its citizens on global income.

    If I make $1,000,000 in Mexico in 2016, as a United States citizen, I still have to pay hundreds of thousands of dollars in taxes to the US government, even if I didn't set foot on US soil.

    High taxes and government red tape make businesses go elsewhere. Outsourcing is a reality. Wealthy Americans renouncing their citizenship is a reality. As long as America continues on its path of big government, people will find alternatives.

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