The term outsourcing refers to the act of contracting out...

The term outsourcing refers to the act of contracting out business activities and procedures to a third party. The act of outsourcing sometimes involves the transfer of assets from one organization to the other. The term is also used to describe the act of handling the control of public services to the private corporations. Outsourcing mainly involves both the local and foreign contracting. At times, the term is used to describe relocation of business organizations to another country which is a also known as off shoring. This term is very popular in the U.S especially in the 21st century (Davies, pg. 21). The main motivation for the activity of outsourcing is the financial saving due to the reduced international labor market rates. The†¦show more content†¦The American labor markets have been severely affected by the increasing outsourcing as this has seen the market to lose a great number of the their services thus making a significant number of the skilled workers to lose their jobs while those who are undergoing their training programs are not sure whether they will secure a job in the country not. That means if they will not find one then they will have to opt to be self employed, jobless or opt to outsource their skills to foreign countries. This has led to more American workers who are trained to look for jobs that they do not fit or that which they are not trained to perform due to lack of job that they are specialized in as the companies have taken the operations to other countries like China and India (Anil, pg. 7). These two countries have taken the big share of the American manufacturing industries that have outsourced their services. Thus the labor market is logged with competent workers who have he required skills but that are contributing nothing or less t the growth of our economy. Outsourcing has resulted into some companies reducing their workers as they have taken most of their manual operations to foreign countries thus they do not requires a large working number of employees as in the previous situation. Previously, everything was done locally from production, warehousing and distribution where as today these companies have taken almost 60 to 75 percent of theseShow MoreRelatedHow Do Industrial Relations And Employee Contracts Impact Recruitment And Selection Procedures?1558 Words   |  7 PagesUsing examples, explain what is meant by outsourcing and how it can be used in business. â€Å"Outsourcing refers to the contracting or subcontracting of noncore activities to free up cash, personnel, time, and facilities for activities in which a company holds competitive advantage†(Barlow, 2012). 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