Outsourcing Criticisms, Criticisms of Outsourcing

Outsourcing Criticisms, Criticisms of Outsourcing

Outsourcing- Criticisms


As outsourcing has gained worldwide popularity for its cost effectiveness, companies have also found several other reasons why outsourcing is beneficial. However the outsourcing trend is not without its share of critics. Let us examine some of the common issues raised against outsourcing.

Quality versus Cost

This is one of the most frequently raised issues. When you outsource work for saving money, does the quality or performance by the vendor/ service provider meet the expectations of your company or consumers? Where does quality of outsourced work stand in comparison to work done in-house? However it has to be noted that the standards for judging what is good and what isn?t vary from culture to culture. Thus what is good service in one country may not measure up in another one.

Worker Insecurity

Outsourcing has contributed a great deal to increasing worker insecurity in several ways. The lesser developed countries may benefit for a while from the trend in terms of more jobs, higher wages and an increased standard of living. However these benefits are temporarity. Critics feel that, in the long term, outsourcing is all about pitting workforce of one country against the workforce in another country, forcing them to offer their services at ?competitive rates? or suffer being left back.

Issues in the US

]In the US, outsourcing has become a hotly debated political issue, the pivotal point being the implications for the domestic workforce. The Democrats have taken a stand against the US firms that outsource work abroad or carry out their operations from overseas locations to evade paying US taxes. Opinion polls conducted among citizens suggest that at least 65% of the citizens share some of these concerns about the economy.

The technology workers of the US also feel threatened by outsourcing, as it affects their livelihood. Instead of creating more new jobs in the country, outsourcing has taken many high-tech or otherwise highly paying jobs to foreign countries. Thus the middle class worker of the US feels that the government, by enabling the outsourcing trend, has failed to protect his/her interests.

Information Security

Information security has been another major area of concern in outsourcing, especially for companies that allow outside (the vendors) access to sensitive data (for e.g. financial information about customers). A major such fraud case was reported in 2005, where call centres workers from India misused their access to transfer money from some Citibank accounts to their own accounts. With such possibilities, companies that deal with sensitive information have to be extremely alert in outsourcing work.

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