The Benefits Of Outsourcing For Businesses
Businesses often recruit services from a source outside of its internal operations and engaging in this procedure is referred to as outsourcing. Outsourcing jobs is becoming more accepted with businesses in today's global economy. Organizations are realizing the benefits that come with outsourcing jobs. Companies will outsource jobs for various reasons. Organizations primarily outsource jobs due to cost reduction. According to Griswold, 'outsourcing delivers large and measurable benefits to the U. S. economy: It reduces costs for IT and other services by as much as 60 percent, keeping U. S. companies competitive in global markets, benefiting workers and shareholders alike'.
Companies can significantly decrease labor wages by outsourcing specific jobs such as telemarketers or call center/service representatives. Moreover, businesses can expand their companies by renting or purchasing plants and factories outside of the U. S. Not only is real estate cheaper in other countries, but it also saves costs on property taxes, insurance, and maintenance fees. Furthermore, outsourced manufacturers can produce products or goods cheaper and faster than internally within the company. Purchasing specific parts from an outsourced manufacturer that specializes in specific items (such as computer chips or buttons for clothing) cuts costs for the company than producing these items within the company.
Outsourcing jobs allows businesses to seek skilled workers globally. Companies can seek qualified candidates, across the globe, for lower salaries and wages. Organizations can find educated and experienced workers willing to work for less pay than a U. S. citizen would make. Another incentive to outsourcing workers overseas is the opportunity to find multilingual applicants that can assist with the organization's global consumers. Having multilingual outsourced workers enables the company to enhance and improve their communication skills with customers around the world. This is a tremendous advantage for businesses to expand and strengthen their growth potential. Furthermore, outsourcing jobs leads to lower expenses for many companies.
Price levels on manufactured goods can be reduced for consumers due to lower operational and overhead expenses. When businesses manufacture their goods overseas, daily operational costs such as maintenance, utilities, and infrastructure fees are considerably decreased, transferring these savings to the consumers. Additionally, with lower expenses, finances can be appropriated in other areas of the business. Supplementary finances could be increased within other departments such as IT, advertising and marketing, or Research & Development. Correspondingly, companies could offer their consumers these discounts or keep their products within the competitive selling rate with similar products and generate extra revenue. Coupled with lowered expenses, this can potentially lead to higher sales and a higher ROI (Return on Investment).
Outsourcing presents many benefits for businesses. Finding outside specialized sources for specific purposes permits organizations to focus their priorities elsewhere within the company. Increasingly companies are realizing the cost efficiency of outsourcing jobs. Potentially, outsourcing can give businesses the opportunity to expand globally and increase profitability through cost reduction savings and expenses. This is a strategic plan that businesses should invest their time and look further into.
'Outsource, Outsource, and Outsource Some More. ' National Review, vol. 56, no. 8, May 2004, pp. 36–38. EBSCOhost, search. ebscohost. com/login. aspx?direct=88888true&db=aph&AN=12856393&site=ehost-live.