Introduction
Even though manufacturing aspects are essential, other departments like human resource, payroll, information technology and accounting are equally important in the running of an organization. They are referred to as “supporting roles” and their role is to sustain the manufacturing process.
Although they do not guarantee direct income, supporting roles are compulsory for efficiency. Notably, they have a cost implication as qualified personnel need to be hired, and other needs met before they can fully operate.
As a result, organizations usually have an option of either keeping these people as part of the organization’s labor force or outsource them from a third party (Burt, Petcavage & Pinkerton, 2010). Regardless of the choice, there are known advantages and disadvantages some of which have been discussed in this essay.
The first advantage of maintaining employees is the fact that they understand the business and the operations of the organization. For instance, each department understands how specific tasks are performed, involved logistics and challenges (Burt, Petcavage & Pinkerton, 2010).
Additionally, retained employees have a sense of loyalty to the organization despite their ability to perform required tasks. Such loyalty is important in cutting down on turnover thus eliminating the costs for constant hiring of new employees.
For instance, an IT technician who has worked with the company for years understands the infrastructure and software needs of the organization. As such, the type of knowledge and experience gained for a long period of time cannot be easily replaced, and this type of loyalty is extremely rare.
One of the disadvantages of internal employees is the fact that their loyalty is always unpredictable and outsourcing would be a better option, especially in the existence of a turnover (Hunter, 2005). Additionally, departments with a negative outlook and poor output can only be made productive by outsourcing in order face out the unproductive employees who could be joyriding in the organization.
However, outsourcing should not be used to threaten employees within the organization to maintain the working morale of existing employees (Burt, Petcavage & Pinkerton, 2010). Cases where employees are threatened breed higher levels of turnover emanating from employees looking for greener pastures. This leads to extra expenditure by the organization.
On the other hand, outsourcing is considered to be cost-effective in terms of the amount of salaries paid as compared to what permanent employee earns. With employees entitled to 15% benefit, an overall departmental analysis would reveal higher expenditure in retaining employees in an organization.
Full-time employees also take up a lot of space in the form of an office which has to be hired, furnished and maintained (Burt, Petcavage & Pinkerton, 2010). Hiring of offices also introduces other expenses like operating licenses and other bills.
Lastly, outsourcing allows an organization to experience new ideas and performance skills as compared to internal employees who are used doing the same things day in day out. Problem-solving would b easier as nurtured errors and mistakes are eliminated.
Similarly, outsourcing has its share of disadvantages. Many organizations find it hard to prioritize their needs thus leading to delays in problem solving. Additionally, organizations lack the mandate of selecting people from the outsourced company depending on their existing needs.
Due to the possibility of shifts, outsourced employees may take long to understand the organization. Lastly, outsourcing allows giving away knowledge, which takes years to accumulate. It may lead to lose of irreplaceable employees (Burt, Petcavage & Pinkerton, 2010).
From the above analysis, it can be seen that there are several advantages of retaining employees in an organization. However, these may or may not outweigh outsourcing merits. It is therefore, the responsibility of the management to make a sound and economic decision.
References
Burt, D. N., Petcavage, S. D., & Pinkerton, R. L. (2010). Supply management (8th Ed.). Boston: McGraw‐Hill.
Hunter, I. (2005). HR business partners. London, UK: Gower Publishing, Ltd.