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Why Would A Company Not Outsource

This article will give some reasons why a company should not outsource but will focus on what is out there to source this information from.

First some background.

My father, who worked as a manager of a clothing company back in the day, and I had a discussion regarding a good outsourcing company (or what are referred to as a third party).

He informed me that when he started his business they outsourced as much as possible.

So every single function of the business was handed over to a third party (if you're familiar with business outsourcing this is generally what they do).

His reasoning behind it was that it was cheaper in the long run because there is no risk and the business is 100% in the hands of the third party.

Did it save a lot of money?

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It's estimated that over 70% of the entire U.S. workforce could be replaced by machines within the next 20 years.

That is a very large number if you take into account the fact that the majority of the country is part-time, so that is actually working full-time. So over 2.5 million workers could be lost over this span.

For this type of business to be successful, it seems to me that they would have to be able to find a worker that can do this job at a lower cost than even minimum wage in the United States. That seems to me like a tall task.

Other considerations:

What if the employee is highly skilled?

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These kinds of things have already been studied. In his article, Ed Openshaw talks about what he found regarding manufacturing jobs in the United States.

This was something that he ran in 2006 and found that there were 2 million jobs in the U.S. that were at risk of automation.

He then went on to look at the people in those jobs and found that over 60% of all manufacturing workers in the United States are over 40 years old.

In other words, they were not replaceable by the advances in technology.

Do I have to pay them $70/hr?

One thing that we've talked about before in another article is the concept of not overpaying someone and how that kind of approach can help to improve morale at the workplace and thus increase productivity.

This is something that should be at the forefront of any company's business strategy when dealing with contract workers, but if you're not familiar with what is involved and what you're going to pay in return, you're going to be in for a world of hurt because there are going to be a lot of contractors and hourly workers that will do the same thing for a lot less.

Just an example of what happens when you overpay a contractor.

Does that mean I can't outsource?

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You can. It's just going to be a lot more complicated. This is why companies will outsource.

To take off the entire responsibility of managing the job.

Companies will outsource so that they can focus on their core competencies and can make sure that the outsourcing company is doing what it is supposed to be doing.

They'll go through and do a security audit of the person and software that you've hired. They will audit their process to make sure that you are getting what you're paying for.

They'll ask if they've done everything correctly and if not, they will fix the issues that are in place. They will do whatever is necessary to get the job done correctly.

Is it going to cost a lot of money?

It is going to cost money. But there's no reason for it to be a lot more money.

In fact, it shouldn't cost much more than the existing price of the job you're outsourcing.

Your company has done a good job auditing this person, the software that you're using, and the contractor that you've hired. You've done everything possible to make sure that they're providing what you've contracted for.

Now you're going to pay the subcontractor for this. You're going to pay them a small amount for the subcontract, then you're going to pay them the normal rate that they normally get.

If this contractor can get the job done for a little bit less than what you're paying them, they're going to make it up in volume. As they do more jobs for you, they're going to be able to negotiate a little bit more.

But if they can't get the job done for a little bit more than what you're paying them, you'll know and you'll do a spot check to make sure that they've performed the work.

In the worst-case scenario, you'll have to make a call to get a new contractor. And you'll have to make a call to get a new contractor that can do the job.

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