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Thread: Outsourcing individuals versus a company

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    Diamond Member Corzhens's Avatar
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    Default Outsourcing individuals versus a company

    I know of a company that deals in packaging they source out the materials and even does the printing aside from manufacturing the desired packaging particularly cartons and boxes. One foreign company specializing in dairy products established a branch here. But instead of hiring workers, they hired the entire packaging company. The president said that it saves them from the hassles of HR problems. It is more expensive though but the dairy company said it is worth the cost.

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    Default Re: Outsourcing individuals versus a company

    Absolutely. If you look to Internet marketing, for example, you could easily outsource every element of the site's design if you merely are certain what will make it profitable. The layout, traffic, content, etc, all could easily be outsourced, but whether or not it's worth the money is the ultimate question. If something as basic as a site can be outsourced, outsourcing must obviously be a large player in more robust businesses.

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    Diamond Member Corzhens's Avatar
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    Default Re: Outsourcing individuals versus a company

    Outsourcing is now becoming the fashion in big businesses. Some companies I know of are abolishing a department or 2 in favor of outsourcing. Although outsourcing involves more costs than hiring individuals, the upside is that they can always ask for a replacement of the employee if the performance is not satisfactory while a hired employee cannot be terminated just like that. Besides, an outsourced firm has no retirement pay and all other benefits like bonuses. So in the long run, outsourcing is more economical.

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    Default Re: Outsourcing individuals versus a company

    The first book on IM I ever read was 100% focused on outsourcing as an ideal choice. There's so many people that want to work that don't need as much money to survive that paying them $5 an hour USD means they get to eat for a few days, where as here in the states, everything is so inflated that its only a meal or two unless you're thrifty with your calories per dollar.

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    Diamond Member Corzhens's Avatar
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    Default Re: Outsourcing individuals versus a company

    Quote Originally Posted by TheFunneler View Post
    The first book on IM I ever read was 100% focused on outsourcing as an ideal choice. There's so many people that want to work that don't need as much money to survive that paying them $5 an hour USD means they get to eat for a few days, where as here in the states, everything is so inflated that its only a meal or two unless you're thrifty with your calories per dollar.
    This reminds me of the story that my husband saw when he was in California. In a street corner, there were men in workclothes. And then a truck comes to pick them up, but not all of them, there was a sort of selection process. In the afternoon, that same truck comes back with the selected men who now was richer by a day's labor pay. That outsourcing of illegal migrants has been happening ever since. That system saves the agricultural companies big money in worker's benefits and retirement pay. Those outsourced are contracted work for the day only so there is no commitment whatsoever.

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    Default Re: Outsourcing individuals versus a company

    If the outsourcing company assigned to perform duties on behalf of another company is situated in a country with significantly lower currency value then the firm can save up on operational costs. Established companies can deliver quality performance at a faster and efficient rate compared to just hiring a slew of freelance individuals. You would have trouble computing their working hours.

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    Default Re: Outsourcing individuals versus a company

    I think this is the much better option because you don't have to deal with individuals anymore and instead the process can be overseen by a separate company which can be held accountable for all the passed on responsibilities. I agree that it is probably worth the extra cost especially if it means you can ramp up progress or production because of it.

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    Diamond Member Corzhens's Avatar
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    Default Re: Outsourcing individuals versus a company

    Sometimes it is more economical to outsource an individual because outsourcing a company is more expensive for what you pay includes their total operating expenses plus benefits and perks. For smaller jobs like typing and encoding, big companies resort to individual outsourcing. The contract is 5 months and it is understood that the outsourced individual is considered terminated after the said period. It is called contractualization that is now being protested by the labor groups.

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    Default Re: Outsourcing individuals versus a company

    Agreed. I think outsourcing whole companies is only recommended when your foreseen expenses of hiring each person individually starts to become too much of an expense that you are better off just hiring the whole group as a whole. Also the management of it tends to be a lot easier especially if you are just acquiring services of someone else in which case they will be held accountable for any lack of quality.

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    Default Re: Outsourcing individuals versus a company

    The trend nowadays is that many large companies have resorted to the outsource their labour force requirements to a management company instead of directly employing the labour. The management company hires the workers and is responsible for their working terms and conditions. The workers employed by the management company are given contractual work and are paid at a lower rate than if they were directly employed, with almost no fringe benefits.The outsourcers resort to this measure in order to eliminate the cost of insurance and other benefits costs which would have accrued, thus resulting in a great deal of savings to them

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