by Charles Simmins

Created on: February 06, 2009

Companies look to job outsourcing as a solution to an on-going problem. The costs of recruiting, training and retention exceed the productivity of the average employee. It is less expensive to outsource.

Who outsources? Many more companies than you might think outsource some of their positions. Hospitals outsource nursing and physicians. Why? There are schedules and shifts that are less attractive to employees. It is possible to fill those hours from an agency at a lower cost than the hospital would have to pay to incentivize their own employees to work the same hours.

Large law firms outsource their copy centers. They, too, have good reasons for doing so. Personnel administration is greatly different between the $200 an hour senior associate and the $10 an hour copy maker. The copy maker requires training and supervision that the senior associate does not. Equally important, you do not want that expensive senior associate making photocopies when it can be done by the $10 an hour employee. Law firms contract with outside companies to operate those copy centers and deal with the issues that accompany those employees.

If your company uses a janitorial service, it is outsourcing. If the security guards at the front desk come from an outside firm, it is outsourcing. Job outsourcing is very common in the United States.

The next time you call your credit card company, you may be talking with someone in a call center run by another company. Call centers may have dozens of customers that they provide services to, using scripts for most of the responses and being available for hours that their customers are not open.

Large companies have employee cafeterias. Many of those eateries are operated under contract by an outside firm, the jobs outsourced. The company ran the cafeteria in 1955 but found at some point that it was cheaper and more efficient to allow a company with some specific expertise run the operation.

The Post Office outsources some jobs. Many of the trucks moving mail between regional centers are contracted and not owned and operated by the Post Office. The Post Office is not in the long haul trucking business.

When people talk about job outsourcing they are often talking about jobs that were sent overseas, to India as an example. Some law firms have sent simple legal work overseas. Computer programming is often sent overseas. We have all encountered the call center that is operating at an overseas location.

In any given industry, at any given company, job outsourcing may be a problem or a solution. It is a decision that good managers assess constantly. What may be a sensible course of action for one firm may not be profitable for another. Job outsourcing is used widely, and in many places that may not be obvious, so it cannot be discounted as a solution.

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