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Why does a Company Outsource ?
Human Resources » HR Outsourcing

Chrm Message From: CHRM Total Posts: 209 Join Date:
Rank: Coach Post Date: 20/07/2006 21:15:10 Points: 1045 Location: India

The company shall decide to outsource few services depending on their decisions, key plans for the future and strategy making efforts.

However, companies outsource services/taks taking into consideration the following factors :-

1. Cost of labour is often several times less and cheap as compared to onshore.

2. There is no need to maintain the whole technical, permanent and functional  infrastructure which in turn offers competency based project successions. 

3. Company can concentrate mainly on marketing tasks thereby reducing the overall routine and low-added value work functions.



"To must stay in the game" - Claude Bristol

Chrm Message From: debora Total Posts: 108 Join Date:  
Rank: Leader Post Date: 20/08/2019 11:30:58 Points: 540 Location: India

The two main reasons that organizations decide to outsource are to reduce costs and to have the ability to focus on core business goals and planning. But the research shows a shift in industry thinking. Outsourcing is not just about saving money anymore. It’s seen as a critical tool in innovation.

1.       to reduce costs
2.       to focus on core business
3.       to solve capacity issues
4.       to enhance service quality
5.       because its critical to business needs
6.       for access to intellectual capital
7.       to manage business environment
8.       to drive transformational change

The primary industries for outsourcing are Consumer & Industrial Products, Financial Services, Life Sciences & Healthcare, and Technology, Media & Telecomm. There has also been a growing increase in outsourcing from industries such as Real Estate, Facilities Management and Procurement.

Automation is having a huge impact on outsourcing. Just as the way we work is changing thanks to outsourcing, the outsourcing landscape itself is changing thanks to automation. While several outsourced positions will be eliminated, there will be many more high-skilled, higher-paying jobs created as a result.

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