4 ms·

Worth noting that this is a "benefit" of not offshore outsourcing, but outsourcing in general. Large companies prefer to purchase services from vendors rather t

by qq66 9y ago

Worth noting that this is a "benefit" of not offshore outsourcing, but outsourcing in general. Large companies prefer to purchase services from vendors rather than hire employees to limit their liability and responsibility for those workers' well-being. For example, a Fortune 500 will prefer to hire small janitorial services companies to service all of their offices rather than employees, so that these small services companies can ignore workplace safety and reduce costs, while the large company can say "Hey this isn't our problem" when a janitor gets injured on the job.

Theodores 9y ago
It is not that, office cleaning is outside the core competency of a company. Hence hire the services of a company that will keep the office clean for a cost, exactly how they achieve that and with what staff is for them to manage as per contract decided on. By analogy think of the milk in the fridge at work. The company could have employed a farmer and bought land for a cow but that didn't happen, instead that was outsourced. Nobody thinks 'must own cow', that is almost always outsourced, certainly in the first world. I think cleaning services are like that, no company thinks to build up a department of cleaners, it is outside the core competency, much like dairy farming is. However, the big companies that are criticised for outsourcing departments started out in an era when there weren't so many security companies, cleaning service companies and such like. If those companies started out now they would not be building up 'cleaning departments' with the management structure, pension plan and bonus incentives, it would just be outsourced, probably to some zero hours minimum wage contractor.
- Spooky23 9y ago
  That's an attitude that's a byproduct of the short term thinking that dominates modern business. Companies that I've worked for or have been associated with that were really good at running facilities always used in house staff for facility maintenance and usually had facility services run by a former Navy chief of the boat or senior army sergeant. If you give a shit, and are big enough to have enough work, you can do janitorial, maintenance and security/reception at a reasonable price. You may save money by having maintenance done by people who give a shit vs. those who care just enough to not get fired. My current employer successfully "insourced" pure utility functions like electricity generation, because it delivered a positive ROI.
  - reacweb 9y ago
    AFAIK, it is good to outsource for cost reduction AND it is important to entertain in house competences to do the work.
  - lostlogin 9y ago
    Was the ROI measured in dollars or in 'doing the right thing' type phases? As an example, from what I have read of Apple, it would have been better for them financially to just take from the grid or buy up existing renewable energy but they see non-monetary benefits to going renewable. Cook has pretty vigorously defended Apples position to chafe holders. While I agree with Apples position, it isn't a cheap option.
- dilemma 9y ago
  This is a misapplication of core competencies. Cleaning isn't complex and the milk analogy doesn't fly because janitors are self-contained producers of cleaning.
  - thanksgiving 9y ago
    The tragedy I think it's the idea is in the negative. Imo it is not a recipe of what you should outsource but rather what you must not. Don't outsource your core competency somehow became outsource everything else. Something I didn't quite understand was a former employer of mine sold their office building and rented all but two floors of the building from the new owner. I never quite understood this.
    - vinceguidry 9y ago
      It's very probable that the firm simply didn't have the management bandwidth to do proper property management, which is a business all on its own and unless you really care about it, you're not going to be able to do it as well or as cheaply as someone who does. I can easily see how a company would prefer paying another company to provide a nice, delineated set of deliverables as opposed to managing workers to provide them themselves.
    - roel_v 9y ago
      Owning a building return a few percent on the capital. Many companies can do better yields, and are restricted by capital. It only makes sense to sell and lease back in such cases. Also, it lets you shift expenses from capital to operational on your balance sheet, which is sometimes profitable in itself.
    - pjc50 9y ago
      > sold their office building Short-term realisable profit and improvement to their cash position, at the expense of future cashflow. It can sometimes make sense if the business's return on capital is much higher than that of real estate, or the business is at risk of having to downsize.
- nickpsecurity 9y ago
  Anyone can clean an office. It's a bad example for outsourcing. There's also security arguments to be made for in-house, respected people since janitors are great position for subversion.

by qq66 9y ago

Theodores 9y ago

It is not that, office cleaning is outside the core competency of a company. Hence hire the services of a company that will keep the office clean for a cost, exactly how they achieve that and with what staff is for them to manage as per contract decided on. By analogy think of the milk in the fridge at work. The company could have employed a farmer and bought land for a cow but that didn't happen, instead that was outsourced. Nobody thinks 'must own cow', that is almost always outsourced, certainly in the first world. I think cleaning services are like that, no company thinks to build up a department of cleaners, it is outside the core competency, much like dairy farming is. However, the big companies that are criticised for outsourcing departments started out in an era when there weren't so many security companies, cleaning service companies and such like. If those companies started out now they would not be building up 'cleaning departments' with the management structure, pension plan and bonus incentives, it would just be outsourced, probably to some zero hours minimum wage contractor.

Spooky23 9y ago
That's an attitude that's a byproduct of the short term thinking that dominates modern business. Companies that I've worked for or have been associated with that were really good at running facilities always used in house staff for facility maintenance and usually had facility services run by a former Navy chief of the boat or senior army sergeant. If you give a shit, and are big enough to have enough work, you can do janitorial, maintenance and security/reception at a reasonable price. You may save money by having maintenance done by people who give a shit vs. those who care just enough to not get fired. My current employer successfully "insourced" pure utility functions like electricity generation, because it delivered a positive ROI.
- reacweb 9y ago
  AFAIK, it is good to outsource for cost reduction AND it is important to entertain in house competences to do the work.
- lostlogin 9y ago
  Was the ROI measured in dollars or in 'doing the right thing' type phases? As an example, from what I have read of Apple, it would have been better for them financially to just take from the grid or buy up existing renewable energy but they see non-monetary benefits to going renewable. Cook has pretty vigorously defended Apples position to chafe holders. While I agree with Apples position, it isn't a cheap option.
dilemma 9y ago
This is a misapplication of core competencies. Cleaning isn't complex and the milk analogy doesn't fly because janitors are self-contained producers of cleaning.
- thanksgiving 9y ago
  The tragedy I think it's the idea is in the negative. Imo it is not a recipe of what you should outsource but rather what you must not. Don't outsource your core competency somehow became outsource everything else. Something I didn't quite understand was a former employer of mine sold their office building and rented all but two floors of the building from the new owner. I never quite understood this.
  - vinceguidry 9y ago
    It's very probable that the firm simply didn't have the management bandwidth to do proper property management, which is a business all on its own and unless you really care about it, you're not going to be able to do it as well or as cheaply as someone who does. I can easily see how a company would prefer paying another company to provide a nice, delineated set of deliverables as opposed to managing workers to provide them themselves.
  - roel_v 9y ago
    Owning a building return a few percent on the capital. Many companies can do better yields, and are restricted by capital. It only makes sense to sell and lease back in such cases. Also, it lets you shift expenses from capital to operational on your balance sheet, which is sometimes profitable in itself.
  - pjc50 9y ago
    > sold their office building Short-term realisable profit and improvement to their cash position, at the expense of future cashflow. It can sometimes make sense if the business's return on capital is much higher than that of real estate, or the business is at risk of having to downsize.
nickpsecurity 9y ago
Anyone can clean an office. It's a bad example for outsourcing. There's also security arguments to be made for in-house, respected people since janitors are great position for subversion.