Outsourcing : Outsourcing Of Outsourcing Essay

In general, the outsourcing is hiring the foreign workers/company to do a particular task, as opposed to hiring domestic workers/company. Besides the outsourcing, the international purchase is an essential activity of companies. In the trend of a booming global economy, a company only focuses on its core value and hire suppliers to supply the necessary product and service. The relationship between companies are complicated and interdependent.

The most cited official projection outsourcing is by Forrester. It is estimated that outsourced US jobs will grow from about 400,000 in 2004 to 3.3 million (recenty revised to 3.4 million) by 2015 which seems quite significant. But on a yearly basis this accounts for about 250,000 jobs but in perspective the number is small compared to the total US employment of 137 million. It actually only constituate less than 2 per cent of 15 million Americans who lose their jobs each year . Goldman Sachs estimates that offshoring has accounted for 500,000 million lay offs in the past three years. A study by Ashok Deo Bardhan and Cynthia A. Kroll at the University of California, Berkeley indicates that up to 14 million Americans now work in occupations that are at risk of being outsourced . Forrester also estimated that 300,000 US jobs have been outsourced. While the Commerce Department 400,000 new jobs, which leaves a net result of 100,000 new US jobs . In addition, an Economic Policy Institute in New York announced that 144,000 new jobs were created in August 2004 . Summarizing the numbers, it seems that outsourcing will have a positive effect on the overall US economy.

The U.S. economy has seen many hardships within the last decade. The economy has suffered from a recession that is still threatening to cripple some Americans and unemployment has been at an all time high. People have lost homes and jobs and many businesses have gone bankrupt simply trying to survive. However, in the midst of this economic crisis some companies have managed to survive. Many companies, approximately 36% of them, have found a way to avoid economic collapse by cutting costs (Job Outsourcing Statistics, 2014). One of the most popular cost reducing strategies of our time is called outsourcing.

This is just one specific example of a company, but an example that is becoming more and more prevalent as companies seek more cost cutting measures to expand profits and improve the bottom line. The manufacturing sector that once was the pivotal and focal point of the American dream is being wiped out and transplanted at an astronomical rate. For example quoting the graphs from the future of manufacturing survey of 2009, companies themselves predicted that 25% of their products would be manufactured directly outside of the U.S. in 2012 and that’s up from 18% in 2009. This is a 7 percent rise in 3 years that will only grow larger as companies become more familiar and more efficient at outsourcing as a growing number of free trade agreements are reached and more information on the process of outsourcing becomes readily available and obtained. But where exactly are these jobs heading to? Again quoting from the graphs of the future of manufacturing survey of 2009, 59% of the companies said they will outsource their manufacturing to china by 2012 and that is up 9% from the 50% that said they did in 2009. 30% will outsource to India by 2012 up 13% from the 17% that responded they already do in 2009. As former Senator Byron Dorgan states throughout his book, China is the leading destination for American jobs with

Many American based corporations have profited immensely from employing companies overseas that specifically concentrate on

The IT Service industry has expanded rapidly. Many companies worldwide have made the decision to outsource this industry to offshore companies. Worldwide demand has increased growth to 40 to 50 percent on an annual compounded rate basis. Many developing nations like Latin America and Asia have made an attempt to obtain some of the IT offshoring business from countries like the United States because it is seen as not only a source for

When a company relies on a production facility that is not local to their home land, they lose the majority of the control of their operations. Many of the developing countries that are chosen to outsource are underdeveloped which comes with a great deal of instability. When a country is not developed, although labor costs are low, the education level, physical and

One of the biggest impacts of globalization has been to IT (Information Technology) and BPO (Business Process Outsourcing) sector. These two sectors have progressed at never before pace. Key reasons for this is easy and cheap availibilty of skilled workforce with

The outsourcing market in Asia Pacific grew substantially in 2007. Although the number of contracts signed in 2007 grew by just over four per cent, their total contract value increased 30 per cent year over year from $9.9 billion to $12.8 billion and annualized revenues showed a 13 per cent increase, nearly double that of global average . The outsourcing performance in the Asia Pacific region is becoming stronger.

Job outsourcing is the shifting of a business from one country to another. Companies may choose to outsource or offshore for a number of reasons, perhaps they are trying to save money on taxes or increase productivity in the company.

Gathering information about the extent of outsourcing is extremely difficult. The Department of Labor relies on employers to voluntarily report in surveys whether they have had any layoffs due to off shoring. Employers are understandably reluctant to be forthcoming with such information. The Brookings Institute held a Data Workshop to discuss problems gathering data on this topic. With the current surveying methods the potential magnitude in underestimating the import levels and overseas job displacement is significant was one conclusion of the workshop.

Offshoring is the practice of relocating business processes to lower cost locations outside the country of origin. This is not a new practice for companies in the United States. Moving business processes to another country to take advantages of lower operating costs and cheap labor seems like a great idea. However, the dilemma for a company is whether the benefits of offshoring outweigh the risks. This dissertation will begin by briefly reviewing the history of offshoring. Next, it will examine the various advantages and disadvantages associated with offshoring. Thirdly, it will explore the growing trends of backshoring and nearshoring in situations where

Locations for outsourcing jobs is very important as companies need to decide what is going to be the cheapest option but also the most beneficial in terms of maintaining their remaining clients and customers, there tends to be quite high volume complaints when it comes to outsourcing jobs, problems can arise often due to language barriers, so choosing the best location

Transferring business to other countries outside the US has become the trend because often times it is much cheaper and sometimes the service and skill set of the work force is better than at home. Most companies have to play on the global field in order to remain profitable and what better way than to hire and train employees from the country you are moving operations into. This hiring of local human capital can pay dividends and add instant credibility to your company and provide a smoother transition into said country. India cost per employee has risen which has shifted many companies to look to the Philippines where it is much cheaper to employ while still keeping a highly educated and skilled workforce.

In India, Business Process Outsourcing (BPO) is the fastest growing segment of the ITES (Information Technology Enabled Services) industry. Factors such as economy of scale, business risk mitigation, cost advantage; utilization improvement and superior competency have all lead to the growth of the Indian BPO industry. Business process outsourcing in India, which started around the mid-90s, has now grown by leaps and bounds.