Through outsourcing, a company hires another firm to provide a service that should be offered to its clients by itself.
The dictionary prepared by the Royal Spanish Academy ( RAE ) does not recognize the term outsourcing . On the other hand, a concept that is used synonymously does appear: subcontracting .
Outsourcing or subcontracting is a practice carried out by a company when it hires another firm to provide a service that, in principle, should be provided by itself. This process is usually done with the goal of reducing costs .
Outsourcing example
Let's take the case of a company that is dedicated to website development. This company offers its clients the start-up of a site, including hosting , design and writing of content. However, directly it only offers hosting and design, since the contents are written by a communication agency to which it subcontracts. This outsourcing is convenient from an economic point of view: it is cheaper for the entity to pay another company for writing than to add writers to its staff.
It is important to keep in mind that whoever contracts the original service should not notice any change in the conditions or have problems due to outsourcing. That is to say: if the person who hired the web development service in the previous example does not agree with the wording, it will be referred to the company that sold the service and not to the communication agency that was subcontracted in the operation.
Outsourcing involves subcontracting.
Savings and precariousness
It should be noted that outsourcing often implies savings for the company but a precariousness of working conditions for workers . For example, many employees who work shifts in branches of large companies with an international presence have contracts with small companies that provide specific services, so their salaries are not comparable with those of those who have been hired directly.
This practice is very common and, in many cases, is considered necessary for the survival of a company, regardless of its reputation or capital. Economic savings are not the only advantage that someone seeks when resorting to outsourcing, but there is also the possibility of avoiding staff training , for which it would also be necessary to have specialized employees as part of the stable workforce .
In addition, outsourcing solves another problem that has led many companies to bankruptcy: it avoids maintaining personnel that only become necessary for periods , to cover part of the development of certain very specific projects, but that do not fulfill an essential function for the main activity . . Stories are common of “very generous” employers who cannot take responsibility for putting someone out of work, and so continue to pay salaries to people who no longer have any work to do; The end of these stories is usually bankruptcy, suffocating debts and the unhappiness of employees at leaving without having collected all their money.
Outsourcing and technology companies
Currently, outsourcing is the basis of the economy of Internet-based companies: as mentioned in the example of the website, small specialized groups are usually involved in the development of a project, each of which provides its services and He then legally separates himself from the employer, having collected his fees.
Another example that sometimes goes unnoticed takes place in the making of a film or a video game: generally, film companies and high- budget video game developers hire several independent teams to collaborate on well-defined objectives , such as the creation of special effects, the composition of music or the physical training of actors for scenes of risk or physical skill.