Dispelling the Myths about Outsourcing
You would be hard pressed to find positive associations with the word ‘outsourcing’ among the general public, yet it can be very beneficial to a country’s economy, so where does this unfavourable response come from?
First of all, people generally use ‘outsourcing’ for ‘off-shoring‘ indiscriminately when they are very different processes. Off-shoring is contracting companies outside of the UK to carry out tasks, often to cut costs, and, more often than not, leading to job losses. It is what outsourcing is vilified for, when all that it is is contracting people and businesses outside a specific company but not necessarily outside the country.
Once this is clarified, the benefits of outsourcing become evident. A company might have subcontractors, but they will often be UK-based so although it may not have created more jobs within the company, it did in another sector, possibly elsewhere in the country. A transfer of jobs rather than a loss has occurred.
From businesses’ point of view, given the current economic difficulties, it could mean the difference between keeping permanent staff on or closing down. Having access to a flexible workforce gives them room for manoeuvre, allowing them to keep up with peaks of demand without over-stretching themselves, thus ensuring they remain viable financially and can keep their commitment to their employees.
Another benefit of outsourcing is that it may create jobs where there aren’t any locally. With the technology available nowadays, working remotely is more efficient than ever and jobs which don’t require staff to be on a company’s premises can still be carried out. A business may therefore be based in London but create income for someone living in the most remote area of the Highlands for example.
In conclusion, it would seem that the negative feelings surrounding outsourcing stem from a misunderstanding of what it actually consists of and its effects on the job market.