Effects of Outsourcing Details
Outsourcing is the act of contracting internal business functions to external third parties outside of a company. Although the term "outsourcing" can technically refer to any external contracting, it usually refers to the contracting of services to lower-cost providers, particularly those located in less-developed countries. The effects of outsourcing are far reaching, and the act has negative consequences as well as benefits. For the company that outsources jobs, the act allows it to reduce costs, which might lead to increased profits and allow it to avoid going out of business. The unemployment rate in that company's region or country will increase, possibly harming its economy, but the opposite effects are seen in the country where the third-party workers are hired.
Outsourcing is an effective cost-saving tool for companies located in developed countries because it allows the company to contract workers in lower-wage, less-developed countries. Those countries might also have lax regulations, which can reduce fees and increase worker output. Such lax regulations might include non-existent or limited labor laws, such as having no overtime pay mandate and a longer work week.
The effects of outsourcing on a company’s bottom line are simple: it reduces costs. The lower cost of labor usually allows the company to achieve a greater profit because it is spending less on labor than it would in its own country, or in another developed country. The effects of outsourcing also reach further into either country’s economy.
Outsourcing is an effective cost-saving tool for companies located in developed countries because it allows the company to contract workers in lower-wage, less-developed countries. Those countries might also have lax regulations, which can reduce fees and increase worker output. Such lax regulations might include non-existent or limited labor laws, such as having no overtime pay mandate and a longer work week.
The effects of outsourcing on a company’s bottom line are simple: it reduces costs. The lower cost of labor usually allows the company to achieve a greater profit because it is spending less on labor than it would in its own country, or in another developed country. The effects of outsourcing also reach further into either country’s economy.
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
Effects of Outsourcing
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