Is Outsourcing Ethical? Concerns & Implications of Offshoring

Is Outsourcing Ethical?

Concerns & Implications

of Offshoring

By Ronald Tuch

By Ronald Tuch

Man deliberating over the question: "Is Outsourcing Ethical?"

In today’s globalized economy, outsourcing has provided many industries with exponential growth potential.

The purpose of outsourcing is to increase efficiency, reduce cost, and get access to outside experts. While outsourcing can often yield amazing results, it does raise some concerns.

Typically, when a company outsources a specific function, they hire outside their country. This model, dubbed remote outsourcing, does raise a big question:

Is outsourcing ethical?

That’s the question that we’ll answer here. Let’s get started!

Benefits of Using Outsourcing Companies

Before we question the ethics of outsourcing, let’s talk a bit about the benefits. Here are the key benefits of using outsourcing companies:

  • Access to a large pool of skilled workers outside the local labor market.
  • Maintain high-quality standards in services and products
  • Helps save on costs in supply chain management and labor.

Is Outsourcing Ethical?

Man researching the ethics of outsourcing on his laptop

There’s a big argument that can be made about the downside or unethicality of outsourcing, but frankly, if it’s done right, there isn’t anything unethical about it.

Why does a company outsource a specific task or function?

Answer: out of necessity, whether it’s to bring innovation, to get access to a larger talent pool, or to save costs.

When outsourcing a particular task, if the company ensures ethical practices, such as fair working conditions, proper wages, environmental regulations, and other things are followed as per the country’s labor law, then there’s nothing wrong with it.

Of course, you’ll hear many people complain that outsourcing essentially takes jobs away from the domestic workforce. But instead of fighting it and thinking of it as an obstacle, we should embrace it and see it as an opportunity for more growth and diversity.

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Unethical Practices: What Are the Ethical Considerations of Outsourcing?

When done right, outsourcing is not unethical. However, in today’s world, many outsourcing providers take advantage of foreign workers. If you want to work with an outsourcing provider, you need to understand which practices make outsourcing ethical and what are considered unethical.

These are the key ethical considerations of outsourcing that you need to be aware of:

Service Quality

There’s a common belief that the quality of service takes a hit when a company outsources the work instead of doing it in-house. The argument is that since the company isn’t responsible for the service, they are not in charge of controlling its quality.

You need to put the needs of the customers above all else. And if that means the quality of the service or product declines due to outsourcing, it’s not worth it.

Security Concerns

Security is a huge concern in different sectors like software and app development. Loss of data, confidential security breaches, vendor lock-in, etc., are credible risks when outsourcing a security function.

To overcome this problem, you need to ensure that your outsourcing partners have the expertise and the reputation to handle the security function and that their certifications and references are credible.

Sweatshops

When people hear about outsourcing, they immediately think of “sweatshops.” It’s slang that’s used to describe foreign manufacturing facilities where people, sometimes even children, work on unfair wages and under poor working conditions.

Even a big brand like Nike faced major backlash because of its unethical outsourcing practices back in 1992. Outsourcing manufacturing work to this type of “sweatshop” facility might save some expenses, but it’s unethical and should be avoided at all costs.

Fair Wages

Ensuring fair wages for workers in developing countries is an important thing to consider for ethical outsourcing. As a company, you must ensure your outsourcing provider is not lowballing their workers.

Working Conditions

Another important factor when outsourcing a task is to ensure the working conditions are safe and hazard-free. Many unethical outsourcing providers don’t care much for the work environment, leading to human rights violations, and you don’t want your company to be associated with these types of violations.

Documentation & Legalities

Unethical outsourcing providers often exploit undocumented workers by offering them lower wages. If you’re hiring an outside workforce, make certain that their documentation is in order and that there are no legal issues.

Environmental Standards

Does the outsourcing service provider ensure eco-sustainability measures? You need to ensure your outsourcing partner is not damaging the environment and that the services comply with the country’s environmental standards.

Implications of Unethical Outsourcing Practices

Developer in offshore country working on app development

Unethical outsourcing practices can have dire consequences on your company image, even when you’re not directly responsible. For example:

  • Outsourcing unethically can lead to a decrease in the quality of products and services.
  • It can generate a negative image of your company if you’re associated with an outsourcing partner that doesn’t offer fair wages to their workers.
  • Fraudulent activities such as incorrect documentation and breach of environmental standards can lead to legal repercussions for everyone involved.

What Are The Ethical Outsourcing Practices?

When looking for an outsourcing service provider, a company should always try to make sure that the provider is committed to ethical practices.

Here are a couple of ethical practices that companies should adopt while hiring an outside workforce:

  • Ensuring proper documentation and certifications of the outsourcing partners, whether it’s an individual or an organization.
  • Addressing the “sweatshop” issue by providing fair wages for the workers and ensuring safe and healthy working conditions.
  • Maintaining policies that comply with the labor laws of the country that the worker lives in.
  • Ensuring the workers have access to safe manufacturing facilities and equipment
  • Providing proper training and growth opportunities to the workers.

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How to Find An Excellent Business Process Outsourcing Partner For Your Development Needs?

Finding an ethical BPO outsourcing partner concept image

If you’re looking for a third-party team to outsource some of your business processes, make sure it’s ethical. But ethics mean little if your BPO partner can’t get you results. So, here are a couple of things to check:

  • Make sure your BPO partner is result-oriented by checking out their website and case studies.
  • The BPO partner needs to be professional and communicative even if they are offshore and are working in different time zones.
  • Make sure your BPO partner has access to and can leverage the best tech.
  • A good BPO partner should also help with quality process analysis, automating and eliminating tasks whenever possible.
  • Your BPO partner should also be flexible and willing to grow with you.

When you’re working on something technical like app development, web design, or software testing, where communication, compliance, and technical expertise are of high importance, you have to pay close attention to the ethics of outsourcing. You can’t afford to make the wrong choice.

At All-Win Solutions, our ethics are just as important as getting results. Book a call with us and get your free 2-week trial to see how we can help you find the perfect iOS developer to supercharge your team.

Final Thoughts On Ethical Outsourcing

So, is outsourcing ethical? Well, Outsourcing can be an excellent tool for a company to not only save costs but also enhance the quality of its services and the skill set of its workforce. But remember, your business practices should always be ethical, and working with an outsourcing service provider shouldn’t be any different.

So, make sure you choose an outsourcing partner that reflects your commitment to ethical business practices.

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