Submitted by Robert Oak on January 30, - 9: Despite the never ending alarming U.
Carefully comparing the costs and benefits of outsourcing your production will help you determine if this strategy is the right move for your company. Lower Labor Costs Depending on where you outsource your production jobs, you can reduce your labor costs significantly.
This includes not only savings on salaries and hourly wages, but also on payroll taxes and benefits.
Overtime laws might also be less stringent than your locale, allowing you to add a shift or offer workers longer hours without increasing your hourly pay rate. You might also be able to reduce your costs by paying an outsourced manufacturer by pieces produced, helping you better control your costs.
You are less likely to face a union in many foreign countries, reducing problems such as strikes, contract negotiations and difficulty in terminating poorly performing workers.
Fewer Regulations Businesses outside the U. Lower Real Estate and Plant Costs You will save considerable money on outsourcing if you reduce or eliminate your real estate, building, maintenance, property taxes, insurance, security, utilities and other operating and overhead costs.
Effects on Sales, Pricing and Margins Lowering labor, operating and overhead costs through outsourcing allows you to maintain or lower your current price levels.
This can lead to increased sales and the ability to take market share from your competitors. Based on the savings you realize from outsourcing, you can lower your prices and still increase your profit margins. When an outsourcer produces an inferior product, it might take you weeks or months to find this out, based on how long it takes to ship finished product to you.
Bad Public Relations Outsourcing manufacturing often carries with it a stigma in the eyes of consumers. While some manufacturers provide living wages and safe working conditions to outsourced workers, consumers might resent that you are taking jobs from their communities and sending these jobs overseas.
Outsourced jobs are often performed by workers who are underpaid, physically abused, overworked or work in dangerous facilities. Some countries allow those companies that outsource to them to pollute the environment.
When these conditions are found, consumer groups often publicize this information and call for boycotts.Outsourcing is the practice of hiring an outside firm or individual to perform contracted work as an alternative to paying employees to do it.
Many companies use outsourcing based on expertise and. Outsourcing includes all of the functions an organization could have chosen to scale up to do internally, but chose to buy from other providers instead.
Many marketing services, for example, are routinely purchased from freelance writers and designers, advertising agencies, BPO . Top 10 Reasons to Outsource.
Outsourcing is the process of delegating a company's business process to third parties or external agencies, leveraging benefits ranging from low cost labor, improved quality to product and service innovation. Outsourcing is bad for the American economy because it sends good jobs overseas, or, outsourcing is good for the American economy because it keeps the cost of goods and services down?
Based on this definition of outsourcing, 77% of Americans say that outsourcing is bad for the U.S. economy. Oct 28, · The most important technology news, developments and trends with insightful analysis and commentary.
Coverage includes hardware, software, . Outsourcing is a strategy by which an organization contracts out major functions to specialized and efficient service providers, who ultimately become valued business partners. In some cases, outsourcing involves the transfer of employees from the company to the outsourcing company.