What Are The Pros And Cons Of Outsourcing

Today, many businesses have adopted the practice of outsourcing, be it within the borders or done internationally. Outsourcing can be defined as “the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them; functions can be outsourced to either a company or an individual” (entrepreneur.com). “Outsourcing has become a major trend in human resources over the past decade. It 's the practice of sending certain job functions outside a company instead of handling them in house. More and more companies, large and small, are turning to outsourcing as a way to grow while restraining payroll and overhead costs” (entrepreneur.com). However, it is very important to make sure that the organization wanting to adopt the practice of outsourcing into their business practices clearly understands what it really is about, how to make optimum use of it for the business to do well, and what are the pros and cons involved with its oncoming. To fully understand outsourcing, it is also necessary to conceive that outsourcing is not just limited to national borders; it can also be done from outside the borders, which is called

The first and a very important advantage of outsourcing/offshoring is the decrease in labor costs. This is one of the most important reasons why companies also engage in offshoring. “Depending on where you outsource your production jobs, you can reduce your labor costs significantly. This includes not only savings on salaries and hourly wages, but also on payroll taxes and benefits. You might also be able to reduce your costs by paying an outsourced manufacturer by pieces produced, helping you better control your costs. You are less likely to face a union in many foreign countries, reducing problems such as strikes”