OUTSOURCING
Outsourcing is where a company or the country contracts labor from outside the country. It may be from professional providers of services. It may be internal outsourcing or offshore outsourcing. Internal outsourcing may create employment but still a country can decide to outsource labor from other countries because it is cheap thus causing unemployment in its own country. Unemployment is where individuals are actively searching for employment. (Topel, Robert 2008). The unemployment rate is high where a big number of individuals are seeking work but the firms offering employment are few .This is called the theory of demand and supply.
Discuss its importance to you individually and to society broadly.
Outsourcing has some advantages and disadvantages. One, when a country or company out sources labor, costs of employing permanent workforce is reduced. Cheaper and skilled labor is outsourced by selecting the best companies offering those services. This is advantageous as one only out sources only when, there is need as opposed to permanent employment, making it cheaper. The country can negotiate the prices making the costs spent by the business to be low. Operation cost, administration cost and other costs are saved when one out sources .Quality of the labor offered is guaranteed to be high because providers of outsourced services are highly skilled and widely experienced. This involves a lot of competition among the outsourcing companies and thus one is assured of great quality. Once the country it will have entered into a legal binding contract with the providers of labor and thus the risks are minimized incase of default where aggrieved party will go to court for compensation. This minimizes business risks and liabilities. If the country had internal employees this would not be the case as the relationship is not legally binding making it advantageous to outsource. Once companies out sources labor they concentrate in other important issues as they immediately lose control of the work force involved. They lay focus on other developments and keep up with competition from other businesses this reduces the work of the management. The outsourced labor will have to work according to the contract they entered into. Either the labor outsourced or the country can sue and this reduces the liabilities and risks involved. This may affect the residents especially the low-skilled ones as they are rendered jobless and the opening available will be outsourced. The society is affected where bad vices are practiced if the people are idle. Unemployment people reduce their consumption while employed people stabilize the economy by consumption and thus minimizing inflation in a country.
Outsourced labor brings changes in a country as new ideas are popped in and new practices are introduced. Innovation also comes along with the new ideas and new practices brought by the external workforce. They bring along the best operational tools and practices which would have been otherwise expensive to buy and practice internally. An outsourcing country increases its tax benefits which vary with individuals, companies or foreigners. New opportunities may be created if a country out sources and the company requires labor from the society. The residents benefits from the employment opportunities offered and also from the new skills they will learn. In most cases, there is a possibility that the residents will be more confident with the specialized services from a foreigner than the local .example the building of roads. Competition from different companies brings out the best to choose from. Lastly a country can outsource labor in order to create leisure among its citizens. This is possible in the most developed countries.
Outsourcing has its disadvantages too and this includes low quality of services .They say low pays leads to low quality. If the country is not paying well, the output may be compromised as they tend to use low production tools, low experienced workers and paying low salaries to their workers, and thus interfering with the quality of services rendered. This occurs especially when a country is trying to save costs. An outsourced workforce may experience certain difficulties like language barrier leading to miscommunications. This occurs where a country may have a different language from the workforce outsourced. Workers in a country may become unsecured regarding their jobs thereby fear losing their jobs to the outsourced labor companies. There is a big problem when companies try to over exaggerate their capacity and ends up not achieving their mission stated. This may create conflicts and may involve lawyers to solve it.. Some companies may lie about their qualification and end up not delivering quality work and this may affect the end results.
Provide concrete evidence that the issue is relevant to you.
As a student who is to join the labor market outsourcing will affect me as there will be no job for me. It affects low skilled workers who are unemployed. For people with ideas to innovate and create new opportunities, this will help me in searching for the right materials which are cheap, and also help me to shop for resources to run the business. This saves costs like production, operational and maintenance costs. The prices are negotiated to where you can afford. This is a strategy to manage a business easily and not expensively. It is important because it may create opportunity to me and also acquire cheap specialized skills from the Foreign Service providers. Incase I open a business this will help me concentrate on core business which will enable me to compete with other businesses. ( Dwyner and Tanner (1999, p.76). Since in outsourcing most of the risks will be transferred to the outsourced company once a contract is agreed. This will help get quality manpower which is cheap.
Provide concrete evidence that this is a broader societal concern.
The society may benefit from outsourcing since in the long run it will lead to high skilled manpower. The society will have opportunities and skills which will be gained from the outsourced companies which have a vast knowledge and experience. The country will benefit from cheap and skilled manpower. This will save a country some finances which can be used for other purposes. There is always high competition on provision of labor and high skilled, and thus qualified and experience labor will be looked at when and the best will be chosen . Also cheap quality material will be outsourced from the best leading to cost cutting issues. Also the country will be able to compete with the growing world.(Jakob Roland munch August 2005). Unemployment affects the countries economy where the people will tend to consume less and save more.
Discuss ways of addressing the problem at your individual level and at the societal level
Low prices negotiated may affect the quality of work done. Thus the companies must be paid fairly for them to be able to use the right tools and use people with the right skills. Unemployment created can be solved by including in the contract that some opportunities must go to the residents. Unemployment can be solved by the government especially by encouraging of new firms. At the societal level innovation should be encouraged thus leading to new jobs. Most people must not rely to be employed but can be employers too. Companies outsourced must be chosen carefully and make sure they have achieved their capabilities. If there is a language barrier may be interpreters may be needed to avoid miscommunications. To decrease the insecurity of the resident the government can introduce employment insurance, where people are insured incase anything happens to their cherished jobs.