Disadvantages of contracting , Other Management

Disadvantages of contracting 

As we saw some of the factors that drive a contracting decision, now let us understand the disadvantages or criticisms associated with contracting in the following areas: 

  • Quality:  The quality of work carried out by a contractor/subcontractor can turn out to be unsatisfactory. This can happen if there is poor buyer-supplier communication or when the buyer makes a wrong assessment of supplier?s capability. 
  • Public opinion:  The public may perceive that the practice of outsourcing damages local labour market and can lead to unemployment.  
  • Language skills:  Call centres often face complaints of low quality service. The complaints usually arise because of linguistic features such as accents; words used and so on which make call centre agents difficult to understand. 
  • Exploitation of work:  Benefits such as medical assistance and retirement are not offered to workers in companies taking up outsourced work.  
  • Staff turnover: This generally happens in call centres where agencies keep changing frequently. This inhibits the pile up of employee knowledge and reduces the performance and quality.   
  • Productivity:  Companies which solely outsource their project for the purpose of saving cost can have negative influence on the productivity of the company. When work is outsourced by a developed country to a developing country, and the workers use hand tools in lieu of the advanced computer controlled machine tools used by workers in the developed country. Hence, the productivity of the offshore workers is lower in reality, although it appears to be higher simply because of the lower wages paid to them in dollars. This gives rise to the perception that the developed country only gains non real productivity by hiring fewer people locally, rather than investing in technology to improve productivity.   
Posted Date: 9/27/2012 3:01:41 AM | Location : United States

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