Positive Perspective
Benefits to businesses
To describe and define the strategic benefits of outsourcing to businesses beyond mere cost-cutting measures, let’s turn to expert business consultants Michael Heric and Bhanu Singh, who have experience in strategic outsourcing and understand its capabilities. According to a Forbes article by Heric and Singh, outsourcing enables companies to tap into global talent, build valuable partnerships, seize local market opportunities, get to market faster, boost innovation, and disrupt traditional business models. In short, outsourcing and offshoring are not merely cost-cutting measures. They allow companies to create and sustain value through strategic capabilities.
According to William Vanderbloemen, founder of Vanderbloemen Search Group, outsourcing is also beneficial for business owners who seek to work around new overtime pay rules, accommodate the slash career style of work-life balance among millennials, control complexity, and work around the additional costs of employees. 'Slash' career is a rising career style among millennials in which people pursue multiple careers or vocations simultaneously. By outsourcing, business owners can embrace this new trend and empower employees to pursue their passions on the side, while saving money. Hence, outsourcing is an effective business strategy for those who seek to control the additional costs and complexities that surround in-house employees. Taking these effects into consideration, American companies can certainly benefit from outsourcing due to greater savings and efficiency, greater strategic capabilities, and less additional costs of in-house employees. This lets them to focus on their core competencies and stay competitive in the marketplace.
Benefits to workers
To describe the link between business performance after outsourcing and worker benefits due to outsourcing, we will examine the expert opinions of economists and peer into current data that supports this link. Glenn Hubbard, economist and dean of Columbia Business School, contends in an American Enterprise Institute article that outsourcing boosts the value of multinational company brands. Hubbard explains that this increase in brand value increases the wealth of American shareholders, promoting high-wage administrative and research jobs at home. So, outsourcing is beneficial to the American economy by raising the brand value of U.S. companies and improving their competitiveness in global markets. This ends up benefiting American workers as well by bringing high-paying jobs back to the States.
While workers and businesses experience the positive outcomes of outsourcing and offshoring, the economy improves as well. Business process outsourcing and IT services reporter Matt Kendall explained, “By 2013, offshoring had created CAD$15 billion in cost savings for Canadian businesses, and IDC predicts that offshoring will drive additional cost savings of CAD$16 billion to CAD$21.6 billion up until 2019—a clear economic benefit for the country”. It seems that the decision on whether or not to outsource can seriously impact a company’s bottom line, and even impact the economy as a whole. Hence, the cost savings obtained by businesses through outsourcing and offshoring are critical to securing more high-paying jobs domestically.
According to Washington Post columnist Steven Pearlstein, since outsourcing produces increased savings and profits for companies, those savings and profits are spent or invested in the United States in ways that have created hundreds of thousands of jobs in other companies and industries. In effect, outsourcing produces a net gain in jobs domestically, even though the jobs and workers are not the same as those that were lost overseas. Pearlstein goes on to explain that outsourcing is not only beneficial for investors and executives at firms, but also customers at these firms who enjoy more products at much lower prices. As a result, workers, consumers, and businesses all stand to benefit from outsourcing.
Benefits to consumers and the economy
To convey how workers and consumers are positively impacted by U.S. companies through outsourcing, we will review current data and expert analyses detailing the positives of outsourcing. Michael Busler of Communities Digital News explained that outsourcing is adding jobs to the economy in the aggregate. He mentioned that outsourcing reduces costs and increases profits. This improves the U.S. economy through lower prices, a higher standard of living, and higher employment. When company savings are pumped back into the economy, the resulting economic growth creates jobs for American workers and lower prices for consumers.
Dan Fastenberg, reporter for AOL Jobs, contended that outsourcing is creating jobs in the United States through greater innovation and greater economic growth. Jobs in other growing industries are offsetting jobs lost overseas. Consequently, more jobs in growing industries, coupled with greater innovation, equates to more overall economic growth. When properly analyzing the effects of outsourcing, it seems clear that it produces short-term gains for businesses as well as long-term gains for the U.S. economy on the whole. In turn, American workers and consumers benefit in the long run.