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Thread: Do you think outsourcing finally hurts employee morale?

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    Default Do you think outsourcing finally hurts employee morale?

    In a survey conducted by Information Week regarding outsourcing of IT jobs, 61% of IT professionals were of the opinion that it does cause low employee morale and 70% are of the view that it does reduce IT jobs. Whenever there is news of outsourcing especially in IT sector it is not welcomed by IT professionals wholeheartedly as they know finally it is going to cost their future growth. But now they start accepting it as inevitable being a part of globalization.

    Do you think outsourcing actually impact workplace morale? Was there any outsourcing event happened in your firm and how did the management handle it?

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    Default Re: Do you think outsourcing finally hurts employee morale?

    IT is one critical area in what concerns outsourcing, as it's one of the first to go away if the company needs to focus on the core business. So no surprise comes from those numbers, but if it is a large company I think it's in their best interest to have their own team, as the response time is faster and there is a deeper knowledge of the different situations.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    When it comes to outsourcing, a lot is going to depend on why the company decided to outsource in the first place as to whether or not it will affect the employees morale or not. If the decision was made to outsource simply because the team at the moment couldn't cope with the amount of work, then it could actually improve morale as it would take a lot of the pressure off so I think we have to be careful in saying outsourcing is always a bad thing.

    If the managers and owners of the business are honest and open with the decisions they make, then even if the employees don't like it they will accept it. It's when a company all of a sudden shuts down a department without explaining their decision and outsources the work, that's when there's going to be problems, and while they don't HAVE to explain their decisions, but by doing so it will at least make the employees aware and feel like they are an important part of the decision making.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    Outsourcing can hurt your morale as an employee since you may perceive that you are not doing enough. The motive was positive but people are different and they respond differently. However, some companies may outsource and go further to betray the employees. My Dad lost his job when we were young due to this system. He never managed to get another job because other companies didn't understand why he left the first company in the first place.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    I think that it certain can, but it just depends on the service being outsourced and what exactly that means for the employees at the local firm. I am sure that in some cases it might actually be a boost, but again it just depends.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    I am torn in this issue. When I was GM of a software house, I used to hire outsourced programmers on a per project basis. We pay almost double the earnings of a regular programmer but that frees our company from overhead expenses like employee benefits. As per my interviews with the outsourced, they prefer to be free lance because their objective is to learn the technology (of different companies that would hire them). Some others said that they could not pass the requirements of big companies (like not having a college degree). With that, I guess outsoucing has 2 faces – one negative and one positive for the employee.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    In some cases, the workers who are fired have to train the employees they are losing their jobs too. That is very humilating. It's sort of like making people dig their own grave like you see on the gangster movie Casino. I wonder of some fired workers have refused to train their replacements.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    I think depending on how it is handled, it can be devastating to employee morale. The empty desks and the loss of office social life if your remaining employees are left dotted round the office is an unfortunate reminder that their jobs may be under threat, and there can quickly be a perception that "if the company is not loyal to me, why should I be loyal to them?"

    How it is not done? At a company I worked for, they announced the first round of outsourcing, let the people go and then told everyone else their jobs were absolutely safe. Three months later there was another round, and again they told everyone their jobs were absolutely safe, ignoring the doubting looks at empty desks. Then there was a third round...The problem was that the third round was meant to be the last, but by that point no one trusted management and the specialists they weren't planning to outsource all left for competitors anyway. The company no longer exists.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    Quote Originally Posted by Jason76 View Post
    In some cases, the workers who are fired have to train the employees they are losing their jobs too. That is very humilating. It's sort of like making people dig their own grave like you see on the gangster movie Casino. I wonder of some fired workers have refused to train their replacements.
    I am not really sure what you are saying here. So they get fired, and they need to train the people who will succeed them? Well, this doesn't seem fair or wise from the side of the company because they can train them poorly as a revenge. I would not advise this solution.

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    Default Re: Do you think outsourcing finally hurts employee morale?

    Quote Originally Posted by pwarbi View Post
    When it comes to outsourcing, a lot is going to depend on why the company decided to outsource in the first place as to whether or not it will affect the employees morale or not. If the decision was made to outsource simply because the team at the moment couldn't cope with the amount of work, then it could actually improve morale as it would take a lot of the pressure off so I think we have to be careful in saying outsourcing is always a bad thing.

    If the managers and owners of the business are honest and open with the decisions they make, then even if the employees don't like it they will accept it. It's when a company all of a sudden shuts down a department without explaining their decision and outsources the work, that's when there's going to be problems, and while they don't HAVE to explain their decisions, but by doing so it will at least make the employees aware and feel like they are an important part of the decision making.
    I think whenever outsourcing happens in a company the major motive behind that will be to boost profit by reducing operational cost. This becomes more imperative in the current scenario of cut throat competition. Even market leaders are losing ground in the market due to stiff competition and the only option left for them is to reduce the cost. When it comes to cost reduction the first thing management will look into is manpower cut. In any company budget manpower cost allocation is the biggest one. So optimum utilization of manpower can immediately reduce the cost.

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