Effects of Outsourcing Accounting Jobs to Foreign Countries

Effects of Outsourcing Accounting Jobs to Foreign Countries

Outsourcing accounting jobs is becoming increasingly popular for large companies due to the economic benefits that result from it. Cutting costs and maximizing net income is the goal for any business, so naturally outsourcing is a very seductive option. But although it may help companies save an extra buck, there are a substantial amount of risks involved. Despite the risks, many companies still choose to outsource because they care more about maximizing profits in a risky environment versus paying more money for a safer service.

One of the most common countries that companies choose to outsource accounting jobs is India. Although India is still a developing country, it contains over one billion people and is growing at an astronomical rate. Since India is still a developing country, the labor rates for the employees are diminutive compared to the salaries in developed countries like the United States. So by companies choosing to outsource to countries like India, they cut down their costs significantly. Outsourcing used to be a tool only used by large companies, but in today's business world, even small accounting firms are jumping on the bandwagon. But companies need to start thinking about the domestic effects that are caused by outsourcing.

Despite India and other countries being able to provide cheap and efficient labor to businesses in the United States, outsourcing as a whole has an adverse effect on the domestic labor force. It becomes increasingly difficult for young and emerging accountants to find jobs in their respective countries because the availability of jobs is dwindling. Not only does it push young students away from fields that outsource, it also causes a tolling mental distress on those already in the field. The fear of losing a job can cause employees focus and morale to decrease, creating the overall environment in the workplace to have more tension and cause employee performance to decrease. If a company is known to outsource, than it may cause many possible job-seeking people to not even bother applying to companies that have that reputation.

Another problem with outsourcing is the many risks that go along with it. A major risk of outsourcing is the inability to oversee the work being done. Since companies cannot manage the work being outsourced halfway across the world, it increases the risks involved. The company that is outsourcing might have a poor management staff or inexperienced workers. The job might not be done as well as a firm would have liked because they were unable to correct the problems in the process. The companies that choose to outsource might end up wasting more time and money having to correct the errors that were made. Even if a firm wants the outsourced company to fix the problems, they will probably just try to charge absurd fees for the extra work that would have not occurred if they had not outsourced the work.

Regardless of outsourcing being able to save companies large sums of money, the risk does not appear to be greater than the reward. Outsourcing clearly poses risks to the business itself as well as its employees and potential employees. It poses a bigger threat to the United States economy than most people would imagine. Outsourcing only impedes the unemployment crisis because more and more accounting companies will turn to foreign labor and it will result in numerous people losing their jobs and not being able to find new ones in turn. This vicious cycle will only prevent the United States from recovering from the economic recession. Along with the risk posed to the United States economy, the risks posed to the companies themselves are prevalent. There are many risks such as unsatisfactory work, failure to manage jobs, hidden charges, going concern, confidentiality issues, and many more. The United States should cut back on the use of outsourcing considerably in order to help stimulate the domestic economy and provide businesses with safer practices.

Sources

Barkley, Michelle. "Make a Progress With Accounting Outsourcing in India." (2010): 1. Web. 17 Nov 2010. .

Malarvannan, Mani. "Financial and Accounting (F&A) Outsourcing Opportunities." (2009): 1. Web. 17 Nov 2010. .

Mehta, Suketu. "Outsourcing: Disadvantages of Outsourcing." (2010): 1. Web. 17 Nov 2010. .

POST COMMENT

Working With Vines to Spruce Up Your Garden or Patio Free Sms Services Provides Flexible In Communication Among Professional And Youth Top Professions That Cannot Do Without a Stunning Silk Scarf or Shawl Professional Tips On Golf Hair Loss And Job Interviews Pharma jobs a lucrative career for science students Professional Web Development: The Way Web Developers Work Minibus Hire - Choose A Professional Rental Firm In Auckland The Seasoned Professional Workforce Ethics Medical Transcription India Has Trained Professionals Worry about your Jobs - Placement Consultants providing free Service to for your Goals Brighten Your Career Through Various Professional Courses Debt Collection Agency Why You Need Professional Help?