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The Limits and Dangers of outsourcing work



It is important in the current business climate where outsourcing work is becoming cheaper and more widely used, a company seriously considering of investing in this industry seriously consider their options. Companies that outsource for the merely for the popularity of are often left in the lurch and surprised by the unexpected cost and complications involved.

About one-half of all outsourcing arrangements are terminated for a variety of reasons. These reasons could range from overseas firms encountering finical difficulties or even being acquired by other vendors with totally separate priorities and operate under different procedures. These often put off smaller companies from renewing outsourcing contracts whilst some even return to home based hiring. However there are a number of reason why outsourcing work contracts fail. Below are just a number of many partnerships fail before they hit the ground.


For those businesses that are hit hardest by failed outsourcing contracts, it is those that arbitrarily set fixed percentages of jobs to be outsourced. They come to eventually regret this. Newcomers thinking of outsourcing work overseas should be aware that like in any other business there are some rouge and unreliable firms out there. In a recent poll asking business owners why they opted out of outsourcing work, most stated that their vendor often operated on a fist come first serve basis. However when they gained a more “important” client, they found that their own contract was eventually set aside to fulfill the requirements of a lager company. Outsourcing companies usually operate on this fist come first serve basis, however due to demands and an often limited schedule companies, and habitually the smaller ones will find that their workload is given low priority. This should come as no surprise in a competitive market but newcomers should be aware of the potential to lose business based on delayed outsourced services.


  • Another footfall in outsourcing work that businesses should be aware of is, the very probable likelihood that an outsourcing vendor may suffer a rapid turnover of skilled employees who find jobs with desirable firms. The typical business processing operations of Indian outsourcing firms - including call centers and offices handling payroll, accounting and human resources functions – often lose 15-20 percent of their work forces each year. This should serve to remind companies that, whilst the primary reason for outsourcing work is to reduce labour cost, the employees working for outsourcing vendors are in fact highly skilled professionals, and like everyone else they will ultimately look for the best deal for themselves. Consequently just as the company’s home based employees they should not be taken for granted.


On the other side of the coin whilst there are no shortages of skilled tasked orientated staff in outsourcing, such as programming or clerical work, companies should not make the mistaking of outsourcing managerial positions to offshore bases. A telling sign of an newcomer to the outsourcing industry is the offhand attitude some businesses take in outsourcing crucial managerial positions to offshore bases. Whilst there may be a need to reduce overhead cost within a home market there is a need to managerial positions to stay within home market to liaise with the consumers there and maintain the organisation’s overall structure.

Any company boss thinking of outsourcing work to foreign markets should also be aware that off shoring does have a cost. One of the major factors why corporations favour outsourcing to homegrown jobs is the diminution in overhead cost. Following a close second to that is the reduction of the cost involved in letting office space. Naïve company bosses more often than not, dive straight into an outsourcing contract, thinking that office spaces and everything else from foreign states runs on the ready made fast efficiency typically associated with a MacDonald food diner. Some outsourcing vendors very regularly state that extra charges will be made to corporations for funding and facilitating employee’s journey to and from work as well as the actual office space itself. Of course it is usually hidden within the small print and corporations find not only have they been played at their own game but, that are left dumbfounded by the cost of operations that far exceed the overhaul expenditure for any home maintained outlet. 


Some of these extra expenses include complications in the transportation system which ultimately see corporation busing outsourced employees to and from work. This is added to the time lost on repeated blackout in some place that do not have the steady frequency of electricity available in the States or in western nations. 


Real estate for outsourced jobs can at times costs twice as much as that of the home nations of corporations. This occurs for two reasons. One is the cost of upgrading the poor infrastructure overseas. The second, id the fact the inexpensive outsourced labour pools are usually found n very large cities, while facilities such as call centres back at home are located in lower-cost suburban areas.

Another danger of outsourcing work for professionally skilled home candidates to offshore industries, is the threat of copyright infringement to the home company, It is advisable that companies limit their outsourcing to routine engineering and maintenance tasks because the worry for the core technology of the company may be infringed by vendors who are not subject to the intellectual property rights of the company’s home nation.

Given the continues flow of complaints from individual customer about the lack of understanding that employees of outsourced jobs have with the language, one mush begin to weigh up seriously the reality of outsourcing you company’s jobs to offshore markets.



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