Outsourcing Work

The simple answer to this question is yes, and no and maybe. Well, maybe it is not such a simple answer because it is a particularly loaded question. The subject of outsourcing is a very sensitive issue for many. There are some who believe that outsourcing, whether it is overseas or domestic, is taking jobs away from qualified individuals while others who are profiting from outsourcing are firm advocates for the practice. This article will take a look at outsourcing and will examine scenarios when quality is compromised as well as scenarios when quality is not compromised.

What is Outsourcing?

For those who are confused about what outsourcing entails, this section will explain the issue. In its most basic form, outsourcing is employing an individual outside of the work organization to perform specific tasks for monetary compensation. Outsourcing can be done on a per project basis, for a set period of time or on an ongoing basis for an undetermined period of time.

For many the word outsourcing has a very negative connotation. When they think of outsourcing, they picture underage employees in third world countries working for salaries which would be paltry by our standards. However, outsourcing has evolved so much and no longer resembles this stereotype. In fact many outsourcing takes place domestically by savvy entrepreneurs who market their abilities as an independent contractor rather than toiling away in corporate America. These individuals, enjoy their quality of life, negotiate fair compensation for their work and accept or decline work at their own will. Furthermore these individuals are often highly qualified for the positions they accept and are capable of producing work of a high standard.

When Outsourcing Compromises Quality

The simplest answer to this question is quality is compromised when price becomes the sole governing factor in selecting a candidate to complete the outsourced task. Of course this answer is not completely accurate because the truth is there are very educated and skilled employees overseas who are fully capable of completing tasks just as well as those living in this country and often for a much lower price. However, when only domestic candidates are being considered and price is the governing factor, quality is often compromised as it is very rare that the most qualified candidate is also the candidate with the lowest rates.

However, it is very common for an individual or a business to allow price to become more important than quality of work. When this happens quality is often compromised for the sake of a larger profit. An example of this is seen regularly on websites where outsourcing projects are listed and potential applicants submit their bids for these projects. Many who utilize these websites routinely select the lowest bidder without regard for the qualifications of the bidder. In most cases these individuals find they make a costly mistake when the work they receive is inadequate.

When Outsourcing Does Not Compromise Quality

Outsourcing does not always compromise quality. In fact in many cases outsourcing is not only the most affordable option but also provides the most qualified candidates. One way to avoid the pitfalls of having quality compromised by outsourcing is to carefully screen candidates before making a decision. This process should be taken just as seriously as hiring a full time employee because the work of the individual will reflect on you as an individual or your business. If due diligence is given to selecting the right candidate it is not likely that quality will be compromised.

When outsourcing work to an individual it is important to request detailed information regarding their qualifications and to verify all information supplied. Examples of information to request include:

* Previous work history
* Relevant work experiences
* Explanation of qualifications

Additionally, it is wise to ask for both business and personal references. These references should all be contacted and questioned about the work ethic and personal integrity of the individual.

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Outsourcing is a term which has received a great deal of attention lately. Despite the increasing trend in companies relying on outsourcing there are still some who do not clearly understand what is meant by the term outsourcing. This article will examine some of the key elements of outsourcing to help the reader develop a better understanding of the concept of outsourcing.

Outsourcing Defined

What is outsourcing? This is the most basic question many have about the subject of outsourcing. They are not yet interested in more complex aspects of the issue because they have not yet grasped the most basic understanding of the process. In the simplest language outsourcing is when a company delegates the completion of certain tasks to an individual not employed by the company directly. This individual may be an independent contractor or an employee of another company who is subcontracted to complete these tasks. In exchange for the individuals services, he or his company receives monetary compensation.

This description of outsourcing makes it far easier to understand the concept. Most people incorrectly assume outsourcing only applies to situations where large corporations have products manufactured overseas by a subsidiary and dont realize examples of outsourcing can be seen just about everywhere in corporate America.

Domestic Outsourcing

Domestic outsourcing refers to outsourcing where both the primary company and the independent contractor or subsidiary are located in the same country. One of the main reasons for outsourcing is to reduce costs but it is not always necessary to outsource work overseas to reduce costs. Cost savings will be discussed in greater detail in the section on the benefits of outsourcing but essentially outsourcing results in a savings as a result of a reduction of labour costs.

Overseas Outsourcing

Overseas outsourcing is the type of outsourcing most people already understand. This is where large corporations such as Nike, and even some smaller companies, employ manufacturing plants overseas in third world countries to upsize their profits. This is significant because their costs including wages, materials and building lease would be considerably higher in the United States than they are in these other countries.

Benefits of Outsourcing

Now that you have a clearer understanding of the concept of outsourcing, you might wonder why companies would go to the trouble of outsourcing certain tasks. Outsourcing is popular because there are a great deal of benefits to the companies who outsource the work. Some of the benefits include:

* Reduced labour costs
* Increased workforce
* Greater flexibility

One of the main reasons companies resort to outsourcing is it can significantly reduce costs. In the case of overseas outsourcing of manufacturing tasks, costs can be cut dramatically because there are lower wages and costs associated with managing and maintaining the manufacturing plants. However, companies also enjoy a cost savings when they outsource tasks domestically. Reduction of labour costs is the primary source of savings in this case. Independent contractors hired on a contract basis for the purpose of completing specific tasks are often not given benefits such as social security, Medicare and workers compensation.

Another benefit to outsourcing is enjoying a larger workforce without actually hiring additional employees. Companies who maintain networking relationships with qualified individuals have more opportunities open to them because they are able to rely on these individuals to assist them if they acquire large or complicated projects.

Finally, outsourcing gives a company a great deal of flexibility. Companies who have a significant workload and backlog of work where the majority of the employees are highly utilized might be hesitant to compete for new work because they do not have a great deal of employee availability. However, with a network of individuals to rely on if the need to outsource arises, the company has more flexibility in pursuing new work.

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There are many who tout the advantages of outsourcing as essentially a little known secret to success. There are certainly a number of distinct advantages to the process of outsourcing. Some of the most notable advantages include cost reductions, increased possibility for profit and the existence of a larger workforce without maintaining a staff of salaried employees. All of these incredible advantages may make outsourcing seem as though it is an ideal resource in all situations but this is not true. There are certain precautions which should be taken when outsourcing a project. It is important to be mindful of these precautions when outsourcing a project to ensure the project runs smoothly.

Verify Candidate Qualifications

When outsourcing a task or project to an individual, care should be taken to screen all applicants carefully before deciding to outsource the work. This is important because you want to be sure to outsource the work to a qualified individual. Awarding a project to an unqualified individual can be a costly mistake if they turn in sub par work at the conclusion of the project. It can also be costly if it results in unnecessary delays or setbacks as a result of the lack of qualifications.

One way to avoid being outsmarted by fancy resumes hyping the accomplishments of an individual is to verify all of the information on the resume before awarding the project. This may entail contacting previous employers as well as references to determine the capabilities and work ethic of the individual. Taking the time to verify the information on the resume can help to ensure the individual you outsource the work to is truly qualified to complete the project.

Outline Project Requirements Carefully

When outsourcing a project it is important to be very clear in outlining the project requirements. This is important so both the client and the independent contractor understand all of the requirements of the outsourced project. Preparing contract documents stating the exact project details and compensation to be provided is a good idea as well. Taking this extra precaution will ensure the client does not have to pay fees until the contract specifications are met. A contract can also be helpful if disputes arise and mediation is required to resolve the conflicts.

Additionally, it is wise to include information regarding the required deliverables in the contract documents. This should include the exact end product which should be submitted. In this portion of the document the client can specify information regarding whether they require the project submitted as a hard copy of the completed project, a soft copy of the completed project or both.

Schedule Periodic Milestone Meetings

Regularly scheduled progress status meetings are very important when a project is outsourced. These meetings should be scheduled often enough to ensure the project does not fall too far behind schedule during any one phase of the project. These meetings can be helpful to both the client and the independent contractor. The client will benefit because they will remain in control of the project and can intervene if the independent contractor is heading in the wrong direction with the project. These meetings are also beneficial to the independent contractor because they can prevent him from being caught by surprise at the conclusion of the project if he misinterpreted the project requirements.

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