Outsourcing Essay

Outsourcing, what is it exactly? It is an effective cost saving process companies use to shipped jobs or services (internal resources) needed by a business or agency to an outside organization or country (external resources). This practice has been going on since the 19th and early 20th century. During the Industrial Revolution period companies would outsource legal work, engineering, and Independent architecture instead of keeping them in house. By the 1970s many consumer manufactures were outsourcing clothes, shoes, toys and electronics. These companies often look to foreign countries with lower wager cost to produce these goods. Once a company was confident they could outsource manufacturing processes and shipping cost to get the goods to the market decrease, more companies began to outsource.

By the 1980s companies began to outsource more administrative functions such as billing, accounting, and word processing looking to keep costs manageable. Computer companies were first in line to outsource their payroll. In today’s economy the outsourcing of most business functions is quite common. Call centers are working overtime handling companies’ steady stream of clients looking to outsource many of their duties. When a customer calls an company's 800 number with a question or a concern, he or she will likely be speaking with someone who is working for a separate company, even though that person has been trained to handle customer care duties.

Not all outsourcing involves foreign workers or foreign countries. Many people today work as independent contractors providing services to businesses. Outsourcing is a growing popular trend that is not likely to slow down in the near future. No longer are the days when an employee works for ...

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When companies attempt to streamline their overhead cost in order to maximize profit, they look to outsourcing as the tool to do so. Management is asking to find ways to accomplish these goals. For example if a company decides to outsource their sales department, they are eliminating the following internal functions: Employees benefits (Health/401k/Pension), vacation/sick time, training/support, office space and supplies, travel and entertainment expenses, advertising cost and payroll taxes. This most definitely saves the company a lot of money, because these functions are no longer being paid out. So what do you tell an employee who no longer has a job? How do you ask an employee who is 60 years of age to step down in a lower paying position? These are hard and delicate things to do, when the economy is uncertain, and the middleclass disappearing.