The Advantages and Disadvantages 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.

‘Is your job next?’ headline blared, followed by the disturbing preview of the article inside: “A new round of globalization is sending upscale jobs offshore. They include chip design engineering, basic research— even financial analysis. Can America lose these jobs and still prosper (R. Hira, 2008, p-1)?” The reaction of this news was swift and divided. Definitely large corporations that will be outsourcing will make huge profits in the long run but “what about the American citizens?”

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.

Outsourcing of American jobs overseas is displacing American's in the United States. American blue-collar workers and the Middle Class American will soon be a word of the past if the US government continues outsourcing the low-skill jobs overseas.

Since outsourcing has begun effecting both party lines, Republican and Democrat officials will be interested because members of congress are self-interested. Congressmen who continue to evade the issue and avoid taking a strong stance on this issue will lose votes when it comes to election time and that doesn’t serve in the best interest for any politician. The other big player in this issue is big business. As labor is offered at cheaper rates overseas, it is very tempting for businesses to take advantage of that resource. Saving money is a great way to raise profits and stock values of companies. This brings up the hardest part of this issue. Americans own stock in the big companies that outsource jobs, if the company does well then the stock does well and it helps the investor. The average family makes between 33 to 45 thousand dollars a year. People in this bracket generally rely on their job to provide income and security for their family, not the value of stock. The middle class is taking the biggest hit and has the most to loose from outsourcing. The middle class has traditionally been the backbone of America ever since WWII. It has always been in any candidate’s best interest to appeal to this group of voters.

Outsourcing is a method used by many corporations in which their products are manufactured in foreign countries often for cheaper labor.This method method of productions has it’s pros and cons.

In today’s society, outsourcing has become a very critical and controversial issue to companies and other countries. Outsourcing is known as offshoring as an organization’s use of an outside organization for a broad set of services. As technology continues to grow and advance more, outsourcing becomes more popular. Many American white collar jobs are being taken over by foreign countries around the world. Almost every occupation or career in the United States has some effect of the outsourcing. As a result, many Americans become unemployed and financially challenged; being that outsourcing can increase the United States unemployment rate. Employees who live in the US rather keep jobs in the country to create more opportunities. On the other hand, few stakeholders

Outsourcing also affects U.S. unemployment and the middle class lifestyle because it takes service-producing jobs from Americans. One study found that, “Today, the total number of manufacturing jobs in the U.S. computer industry is just 166,000, Grove notes. That’s lower than it was in 1975. Meanwhile, employment in Asia’s computer sector has swelled to 1.5 million workers” (Lamphier). This excerpt manifests that outsourcing has removed jobs from America, leaving fewer workers in certain jobs than 35 years ago, yet it has benefited Asia whose workers are paid very low wages. Another researcher concluded, “We’ve lost 105,000 manufacturing jobs since 2000” (Trumka). This passage explains that outsourcing is rapidly decreasing the number of jobs available to Americans in certain careers and is increasing the number of jobs being outsourced. Another researcher argues, “Outsourcing places downward pressure on U.S. wages in general: American workers who are in competition with workers in low-wage countries will have a tougher time earning enough to buy a home, save for retirement, or pay for a child’s education. In other words, wages for many U.S. workers will no

Pay cuts and positions moving to other countries are all parts of the out sourcing process. With outsourcing being a factor today many Americans face the possibility of being laid off. This quote in Jyoti Thottam’s article gives an example of a man who’s life changed drastically over time, “70% of the project had been shifted to India and nearly all-20 U.S. workers, including Maglione, were laid off” (Thottam). Many of his coworkers were laid off in order to make the move to India. It did not end after the lay offs this work lost a 30 percent pay cut from his 77,000-dollar salary (Thottam). If it were cheaper to higher workers from India than why cut his pay? It the end it is the new trend for these companies to make money even it is harmful to the American

Job outsourcing affects the lot of Americans whether it’s in a positive or a negative way. Unfortunately offshoring leads to a decrease in jobs. “ Ten years later, the number of such jobs had shrunk to 106,100, with most of them subcontracted at annual pay of $38,990” stated “Behind shrinking middle-class jobs” (2017). The loss of jobs to outsourcing applies to everyone from fast food restaurants to automotive technicians and when jobs are lost its significantly harder for workers to make the same salary as

Some economists seem to disagree with this idea, stating that the price of goods in the U.S are more than the price of goods overseas. American companies have outsourced jobs to people in foreign countries that are skilled and willing to accept lower salaries. This results in hundreds of thousands of American people unemployed, in particular the semi-skilled and skilled workers. Many companies run into a dilemma though when they outsource jobs. In order for a company to succeed, it must be backed by experience along with customer care. When companies outsource jobs they essentially take away the middle man who has been trained and replace him/her with an inexperienced person who now has to learn all of the rules and regulations. This comes at a price to the company, causing them to come out even or even in deficit because of the time spent and money spent to train these employees. Many IT companies have outsourced jobs to India and the Philippines for the sole purpose of customer care and call service. Taking away these jobs from the American people will only cause them to fall into the lower quartile of the economy, giving them no reason to invest or to

As described in the article, “Outsourcing - Pros And Cons” by Kristin Carpenter; “Outsourcing is basically the practice of one company to contract another company to provide the services that could have been performed by their own staff…. One of the main reasons why companies are into outsourcing is diminished company resources, both in financial terms and in manpower costs” (Carpenter). Because the most powerful American corporations in the U.S are no longer producing their merchandise in the U.S but in developing nations, in order to reduce the cost of labor and increase productivity, the United States no longer has companies that produce jobs in America. And due to the gradual growth of the use of outsourcing, American employment opportunity has decline greatly, leaving many people unemployed and harming our economic strength in the world.

When jobs are outsourced from the United States, many people’s jobs are put at stake and in most cases lost. According to a University of California study, “14 million white-collar jobs are vulnerable to being outsourced offshore.” (Roberts) While outsourcing is commonly perceived as moving physical labor jobs from the US to other countries, office jobs can also be outsourced. This creates a threat towards both sectors of the workforce and increases the amount of people which outsourcing affects directly. As money from large sectors of the workforce exits the US and enters foreign nations, the economy suffers and workers’ salaries are reduced. In turn, people in the lower classes begin the lose money at exponential rates.

The vendors are investing in their employees by various training programs on different technologies. This gives a chance for the vendor to provide the outsourcing services to a company with the help of the well trained employees who are ready to work on the projects. Before outsourcing some of its products and services to a third part vendor, the company has to analyze all the factors that might result from the outsourcing decision, the advantages and disadvantages of the company both in short term and long term due to outsourcing. According to Aubuchon, outsourcing some of its products can be a good thing for a company and the judgment to outsource the services must not only based on the cost factor, but the company has to take all other significant factors into consideration (Aubuchon, 2014).

“WASHINGTON: A bipartisan group of six US lawmakers has introduced legislation in the Congress that would make it tough for companies to outsource their call centers overseas including India” (Economic Times, 2013). In view of the aforementioned citation, it presents an intuitive frame of reference into the principal purpose of this module one case assignment. As this case assignment will be composed of an essay that will initially specify whether or not, I as a student of this course oppose or favor outsourcing jobs overseas. Secondly, this essay will deliberate upon the pros and cons of outsourcing overseas to a developing nation. Additionally, this paper will touch upon a situation with a human resource (HR) manager by the name of Jenny. With respect to, identifying whether Jenny should focus on her current career with her company or challenge her CEO contingent upon her own personal values and principles in relation to overseas outsourcing. Moreover, this paper will highlight a few possible complications with outsourcing to India. Lastly, this case assignment will provide a handful of alternate solutions that Company XYZ could employ, in order that their employees do not have to endure a potential lay-off. Accordingly, some advice will be given to Company XYZ, which they may exploit for the purposes of saving money. Nevertheless, this paper will go into immediately enumerating my opposition of overseas outsourcing.