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Outsourcing – is it a dirty word or a business necessity?

I recently attended an informal networking lunch which was pretty cool actually- the Brown Bag Lunch- this is where people bring in something for lunch (the brown bag) and it is all shared by the group, but that is another post for another time!

At this lunch, there was some general discussion around the provision of skilled labour by an external provider (or country). When we think of outsourcing, quite often all types of viewpoints and stereotypical suggestions arise. Most of these are generally not positive ones, as often we associate ‘outsourced’ labour with concepts such as Telco Call Centres providing poor service, job taking, killing communities etc. Is this fair or is it really an outdated and ignorant viewpoint based on some degree of fact, but driven by the media, or by personal experience as a consumer?

Some further discussion lead to actually challenging and defining what outsourcing actually is, and in fact whether the term is redundant in itself.
If you use a bookkeeper to do your books- is this outsourcing?
If a coach or consultant comes into your business under a contract- is this outsourcing?
If someone develops a website or manages your social media- is this outsourcing?

They all are, and are all acceptable practices which many business use, as it makes sense and allows us to focus on the area of skill and expertise that we have, and therefore we ‘outsource’ these skills that we don’t know how to do.

Where the potential for it to become a ‘dirty’ word arise, is when we start talking about outsourcing the skilled labour to a cheaper, more available offshore solution. This is a practice which occurs as a matter of fact in many parts of the world such as the U.S, but we are a bit slower to adapt this here in Australia…..but why?

Our discussion went around some solutions which provide university graduate staff based in the Philippines in managed office space acting as dedicated ‘full time’ resources for businesses in areas such as Web design, graphic design, admin support, marketing etc. The cost of such services is dramatically less than to provide the same resource here, and this is where some people start getting a bit edgy on the whole concept!

Does it make it bad that staffing is provided at a proportion of the cost elsewhere? Is this seen as ‘slave’ labour? Further investigation finds that in fact these solutions provide a careers, employment and above average pay and conditions than the average worker in these countries, so how can that be ‘slave’ labour or a ‘dirty’ word?

At the end of the day a business is designed to be profitable for its owners, shareholders and staff to ensure its viability. So shouldn’t a business consider looking at all options to drive both efficiency and profits? There are people who will flat out be anti this, and others whom will look at this as a valid business model option. I am sure as time goes by, and the globalisation of the workforce continues to become more accessible, this option will be looked at not only by the big players (who seem to do it badly), but more seriously by small business owners.

What are your views…is it a valid option or still a ‘dirty’ word?

Tony Ozanne

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