As your textbook indicated, business process outsourcing has become an emerging

Question

As your textbook indicated, business process outsourcing has become an emerging trend in most small- and large-size corporations. This has been particularly true during the last year and a half, as many companies have turned to outsourcing in order to reduce overhead costs during these recessionary times. Identify some companies with which you have been personally associated, or companies that you have read about which have gone through the outsourcing process for some of their business operations. How did affected employees react to the outsource process?

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Explanation / Answer

Off shoring means generating production output or services from a different location or country where a simple relocation of the parent organization only. Off shoring is not outsourcing since outsourcing happens to be given to a different organization. For example, when a bike manufacturer in the London starts a factory in China to prepare certain parts for the automobile, they are off shoring their sub-production process as the final product is still coming out from their parent company in London only. Hence, outsourcing of jobs impacts employees of the local organization. It is more of a client-vendor model. From the Human Resource practices perspective, Increase in outsourcing impacts the local employees due to increased overhead cost, operating cost, Intellectual capital cost etc., Hence, continuous improvement in the skill sets of an individual is extremely significant for an individual to continue to survive in an organization. Increased focus on automation, simplification, outsourcing, off shoring and temporary contractors etc., plays a significant role in the local employees. Employees reaction to outsourced process are, company should've given us indications about this in advance, I should've focused on my continuous improvement on my career rather than depending on the company, Outsourcing due to cost control is inhuman nature of the business, I should've entered into a full-time employment rather than contractual job where the terms & conditions would've been different etc., are some of the reactions of the staff that is observed in various organizations.

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