What is outsourcing

Outsourcing is the process by which a company hires another to perform a service or manufacture a product (or parts of a product), instead of taking care of everything internally. This process affects the production chain and labor relations.

Understanding outsourcing

In an outsourcing process, the company chooses to delegate a part of its activities to another company, which is specialized in them.

Originally, companies only outsourced activities that are not part of their core business; for example, cleaning and maintenance services. However, more and more outsourcing reaches even the most central aspects of the business, to the point that some companies that supply products outsource 100% of their production.

When outsourcing, the relationship becomes between company and company, or B2B , and no longer between company and workers who perform the work. For this reason, outsourcing is often referred to as a means of cutting short on labor expenses.

Two types of outsourcing

We can say that there are two different types of outsourcing: one, by contracting an outsourced company, in the traditional way; the other, by hiring a self-employed professional or MEI . What differentiates the two types are the effects of outsourcing.

In the first case, workers do not lose their rights. They still have an employment relationship and all rights guaranteed by CLT. The only caveat is that this link is not with the company where they carry out their daily activities, but with the outsourced company.

Imagine, for example, a fictional Alpha company that outsources cleaning to another, Beta, specializing in this service. The Beta company has its own employees and sends some to work at Alfa. That is, although the cleaning team works within the company Alpha, it is the Beta company that is responsible for paying wages, vacations, 13th salary, and guaranteeing all other rights provided for in the legislation.

Now, in the second case, workers have no rights associated with an employment relationship, as there is no employment relationship. This type of outsourcing is also known as pejotização.

Imagine, for example, that the same fictional company Alfa wants to outsource the construction of its website. So, instead of doing it internally, she hires a specialized professional. However, this professional is not hired by CLT, but by a service provision contract. Therefore, he is not entitled to any benefit from the labor legislation, only to the payment provided for in the contract. In short, the individual is treated as if he were a company himself.

That is why this second model of outsourcing, which is becoming more and more common, receives several criticisms. Some experts claim that he forms an ever-growing group of workers who have “entrepreneurial” status, but in reality are employees whose rights have been precarious. Hence the term “employers”.

Advantages and disadvantages of outsourcing

For the company that outsources part of its activities, this process has advantages and disadvantages.

As already pointed out, the first advantage envisaged is the possibility of reducing costs, since it will not be necessary to pay directly for all the same labor expenses involved in the direct hiring of employees. However, to be sure that outsourcing is the best alternative, from a financial point of view, it is necessary to compare at the tip of the pencil.

In addition, outsourcing also ensures that activities are performed with greater quality and efficiency, since the company (or professional) hired to perform them is specialized.

However, outsourcing also has disadvantages. The main one is that there is accountability in relation to what the subcontractor does and, therefore, there is a duty to inspect its activities.

For example, imagine that a cell phone manufacturer outsources its production line. If the contractor does not have good practices and produces defective devices, the responsibility lies with the manufacturer, even if he has not carried out the production.


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