Niyamath Parveez

If firms have learned anything in the past few years, apart from banks don’t always know what is right for the market and the economy is that outsourcing is becoming a tremendous way to reduce costs and to bring in experienced workers to assist your own staff. Unfortunately, when jobs are scarce and the economic climate takes a turn for the worse, the issue of employment becomes an extremely emotive issue and many people can turn on outsourcing and deem it to be distrustful to a local community. It is true to say that many firms have reduced their workforce in certain areas due to outsourcing but equally, the outsourcing capability has enabled many firms to maintain an element of workplace when without it they may actually go bust. It is important to view both sides of the argument as fairly and as unemotionally as possible in order to deem whether outsourcing is a great solution for your firm.

One area where there has been a lot of healthy debate regarding the merits of outsourcing has been in Wisconsin where the local Department of Transport (DOT) has utilized outsourcing capabilities for more than a hundred jobs in less than the past year and a half. A study into the work has indicated that the department has overpaid for these projects and if they used local workers, it could have cost considerably less. This is before you factor in the benefits that would arise from employing local workers and the positive impact this could have on the local economy. Outsourcing can have a positive impact but local councils need to have an awareness of the total costs and benefits that can be gained by outsourcing but equally, those who criticize need to be aware that it is about more than just cost.

Whilst the jobs may have been carried out by local staff, would the same quality of work have been carried out? If the work was put out to tender, a number of factors could have been the key reason for deciding to choose who was granted the project and it is wrong to think that the lowest cost was necessarily the reason for an out of town firm being given the job. A local council or government has a duty of care to ensure that the work being carried out is of a sufficient standard and quality and using a lower quality supplier may actually cost more in the long run. A high quality outsourcing supplier should be able to ensure that the product or service is in good condition and is able to last for a considerable amount of time.

There is certainly no doubt that the government body should be undertaking a cost benefit analysis on the outsourcing project in order to ensure that the right value is being had from the work. This means that the overall benefit to the local community needs to be factored in and if the provision of work to local citizens would have been of the most value, it is likely that the job should have been outsourced in this manner. However, there are many reasons for choosing an outsourcing firm to work with and until the Wisconsin DOT states their criteria, it would be difficult to state if they were right or wrong for the actions they undertook.