subject: Outsourcing Risks And Criticisms [print this page] The greatest source of disapproval for a company's outsourcing decision is the public itself. Because of the material difference in costs relating to labor, outsourcing can sometimes include off shoring some operations to other parts of the world, where the labor rates are cheaper compared to a business' home country. This fact draws the ire of some labor groups who claim that outsourcing is prejudiced against the local workforce and unfair to locals who could have benefited through employment in the firms. Some proponents of outsourcing are proposing that the concept can actually lead to lower prices which could universally beneficial not only to the market but to the public itself.
Although companies that outsource already have existing processes to third party firms, they do have solutions to address the lack of jobs. These solutions are not at all safe from criticism. Most companies create new jobs for the affected employees, which most of the time require additional training. Critics of this action point out that these employees may not react positively to this option given that they already have a bachelor's or a master's degree, both of which require years of study to attain. There is also no assurance that the company will not resort to outsourcing these jobs as well in an effort to cut back on costs. This kind of solution can result to high attrition and turnover rates, as unsatisfied employees start to seek better and more secure employment in another firm.
There are feedbacks that the quality of services procured by the company from outsourcing firms are actually lower, than it would be when they are using their internal workforce to do the task. This is because the employees of the outsourced firm are not expected to exercise some sort of loyalty to the client firm, which could affect their work ethic. This lack of loyalty is cited as the main reason for less-than-acceptable levels of customer service and technical support. What is worse, there is also the fact that some outsourced companies actually do not deliver the benefits theoretically promised by the practice of outsourcing.
This criticism is not only limited to outsourced customer service but also to outsourced offshore manufacturing. Some critics claim that the companies that provide foundry services in some countries, have facilities that are technologically inferior compared to local facilities in the more developed nations. They point out that productivity could benefit from the technology of local facilities, and that significantly outweighs the lower cost of manufacturing using offshore facilities.
