Facts About the Benefits of Outsourcing Jobs Overseas

Overseas customer support is one area where outsourcing can save money.

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.

Types

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.

Manufacturing

An area where outsourcing can prove beneficial to businesses is in manufacturing. For example, a company that provides offshore labor from China can manufacture the product there and ship it to America for far less than what it takes to have the supplies shipped from China and assembled by domestic labor. It is far less costly to hire someone with a lower cost-of-living standard.

Efficiency

An area where both the company and domestic labor might benefit is in increased efficiency. Delegating mundane jobs to an outsourced company frees up domestic workers for other tasks, thereby increasing efficiency. If the company sends some 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.

Production Levels

Moving jobs offshore to a subcontractor gives the benefit of meeting production needs without problems. If a company producing widgets offshore suddenly finds it has a run on widgets, the offshore subcontractor can move workers from a less important area and place them where their services do the most good. When production needs decline, the workers can move to other positions.

Warnings

It is important to understand that there are some drawbacks to outsourcing. For example, items manufactured 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.

References

• The Miami Herald: CEO Conquers Job Loss With "Homeshoring"
• The Kansas City Star: Outsourcing Costs May Outweigh Benefits
• Information Week: Outsourcing's Benefits May Be More Than Monetary
• Juniper Networks: Outsourcing and Offshoring: The Benefits and Risks
• AME Info: Outsourcing: Ensuring That You Reap the Benefits of IT
• Global Services Media: Five Benefits of Outsourcing Your Contact Center