Research paper on Outsourcing of Jobs: Data analysis

The quality of services and products supplied by outsourced labor force from such countries as China is under a question because the qualification of local employees is lower compared to American employees. In addition, American employees have extensive experience of doing their job, while Chinese employees often have to do the same job that Americans did for the first time. This means that, unlike American employees have extensive experience of operations, while Chinese employees need training to start doing the same jobs as American employees did. Hence, the qualification of Chinese employees is lower compared to American ones. As a result, the quality of products and services supplied by Chinese employees to American companies is likely to be lower compared to the quality of the same products and services created in the US. Nevertheless, the high cost efficiency and low costs of production in China and other countries become determinant factors that stimulate the further outsourcing jobs from the US to China and other countries. However, such outsourcing jobs is apparently destructive for the US labor market because outsourcing leads to the growing unemployment rate in the US.

In such a context, many American organizations, including unions attempt to resist to outsourcing jobs. Leaders of labor union can oppose to outsourcing of jobs. The labor union leader is a representative of workers working in the company and as a stakeholder, who is interested in the positive marketing performance of the company, which can contribute to the improvement of conditions of work of employees and increase their wages. As a result, from the standpoint of the labor union leader, the outsourcing of job means job cuts that are a direct threat to interests of employees. The unemployment is the most dangerous issue employees can face and the outsourcing of jobs leads to job cuts. The labor union leader is supposed to protect interests of employees. This is why the labor union leader can offer an alternative solution to the problem of job cuts. To put it more precisely, the labor union leader can offer to refuse from job cuts but, instead, to reduce working hours and establish the minimal wages for employees to ensure that employees will earn enough for living.

Obviously, in case of outsourcing, job cuts are the logical decision that is normally taken by companies. However, it is obvious that this decision rather provokes a serious social problem ”“ unemployment ”“ than prevents it. In such a situation, the parties involved should look for a compromise because job cuts may lead to the deterioration of the public image of the company. At any rate, this decision will contradict to the social responsibility principle which is extremely important in the contemporary business environment for the positive image of the company. On the other hand, if a company takes decision to outsource jobs, than it is forced to cut jobs. In such a situation, the company should to minimize the negative impact of the outsourcing of jobs on employees who are supposed to lose their jobs. In fact, the company can transfer a part of these employees to the company where jobs are outsourced to (Gates, 2006). In such a way, some employees will have an opportunity to stay at work and earn for living. In addition, the company may follow in a way the solution suggested by the labor union leader but the company should not reduce working hours, but transfer employees to different positions within the company. In such a way, the company will retain well-qualified professionals, who may work efficiently and productively in new positions. Moreover, if the company refuses from the outsourcing of jobs in the future, it will have an opportunity to restore the unit from which jobs have been outsourced. As a result, the company will be flexible enough to respond fast on changes in the business environment. For instance, if the outsourcing of jobs fails, the company can transfer the employees back and resume their work as if nothing has happened. This solution can be backed up with financial compensations as it was originally offered by the company. In this respect, it is possible to use retirement plans to cover expenses of the company on compensations.

Nevertheless, often companies conduct irresponsible policies in relation to its employees, while job cuts have become a norm, especially in the context of the economic recession, which has become a good pretext for cutting jobs in the US. At the same time, American companies cutting jobs in the US outsource these jobs in China and other countries, although they justify job cuts by the economic recession. Therefore, the real reason for job cuts is outsourcing jobs in China and other countries, where the cost of the labor force is lower and companies can save substantial financial resources on payments to employees.

However, specialists (Gates, 30) argue that outsourcing jobs has a destructive impact not only on the labor market but also on the national economy at large because jobs are outsourced that raises the problem of unemployment, the drop of income of the US employees, and, therefore, the drop of spending. As a result, the US economic development slows down, while the economy of China is boosting. In a long run perspective, the situation in the US economy is likely to aggravate even more, unless, the US companies can create new jobs, especially in the field of high technologies, where the share of outsourced jobs is relatively low at the moment.


Thus, taking into account all above mentioned, it is possible to conclude that the outsourcing of jobs can raise serious social issues, namely job cuts that may lead to the increase of unemployment among workers. In this respect, companies conducting outsourcing of jobs should develop a plan of outsourcing which can minimize negative social effects of the outsourcing. To put it more precisely, it is necessary to minimize the risk of unemployment in the result of job cuts. The latter can be achieved through transfer of employees to the target company where jobs are supposed to be outsourced. In addition, it is possible to transfer employees within the company that will preserve well-qualified professionals, who can return to their job in case of the failure of the outsourcing. In such a way, interests of both business and labor union will meet, at least partially. Obviously, outsourcing jobs has a negative impact on the labor market of the US. American companies deteriorate their public image because outsourced jobs are often accompanied by criticism of American companies because of the violation of employees’ rights in China and other countries, where they outsource their jobs. In addition, outsourcing jobs leads to the steady decline of the US economy, while the gap between the US and Chinese economy become closer, to a significant extent, due to jobs outsourced from the US to China.

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