Effects Of Outsourcing Jobs

Business process outsourcing is the business practice where one company contracts the service of another company. On the whole, the effects of outsourcing jobs are largely positive not only to the companies involved but also to the economies they belong to. However, depending on the persons involved, outsourcing may also have undesired effects. This article discusses outsourcing, the grounds for its negative perceptions by some people and why it has to be reconsidered.

Outsourcing is now considered the best management strategy by the vast majority of companies. Among its major advantage are reduced operational cost, work output flexibility, and a companys freedom to focus more on their core competencies. It is no longer sensible for a company to stick to the traditional forms of expansion (hiring more employees, building more facilities), when they can simply contract the services of other companies at a much reduced price. Additionally, a company with a larger web of contacts will also have a larger resource since each company connected is helping it improve and develop. Consider: a strictly local-based sweets manufacturer is hardly a competition for another sweets manufacturer who have people in India, China, and the Philippines providing them with services like data entry and internet promotion. At present, it is only through outsourcing that a company can compete in the global economy.

So why do some people perceive it negatively? The negative impression on outsourcing stems from the belief that it is causing the loss of jobs in more developed countries like the US and UK (where most contracting companies are). Some take these as a threat to these countries economies. These are grounded attitudes, of course. But some may have failed to see that larger effects of outsourcing jobs: that the first to benefit from it is the contracting company, which means that their nations economy benefits as well. In addition, the reduced cost experienced by the outsourcing company is transferred to its investors and, better yet, to the national consumers.

By outsourcing jobs are only transferred, not lost. But what outsourcing is really doing is leveling the commercial playing field through technology. Because technology is open to everybody, those who can make the best out of it become the most successful. One can no longer rely on sheer luck anymore: where one is born means less than what one knows and can do. Economy had always been ruled by the "survival of the fittest"--now outsourcing is only maximizing its scale.

All this may only rouse the naysayers further. They point to the perceived negative effects of outsourcing jobs: poor quality of service, inconsistent product output and problematic language skills. But consider this: competition between external service providers also pressures them to provide quality service. They too have to continually improve themselves and prove their value, just as any other company or business. The competition is stiff everywhere and only those who can find their niche can also find success.