Outsourcing: Definition, Work Rules, Advantages and Disadvantages, and Examples of Work

Outsourcing is work that is not directly related to the company's core business and the work is delegated to other units or companies. Outsourced employees do not come from the user company. In addition, outsourcing work does not have a career path.

Agency workers do not receive the same benefits for their work as regular workers, and their working hours are uncertain due to contracts. Outsourced workers also have the status of workers from the employer company. In other words, the company you work for, or a company that uses outsourcing services, is not committed to the welfare of the employees involved.

Definition of Outsourcing

Outsourcing has become a general term in Indonesian labor law. But what is outsourcing? The definition of outsourcing is the use of third party labor for certain parts of the company's work.

Outsourcing means creating incentives for companies and giving companies the opportunity to allocate human resources where it is most effective. Outsourcing companies are institutions that provide services and employees with special skills to companies that need them.

Outsourcing Work Rules

Outsourcing is limited to work outside the main industry or not part of the production process, except for support functions. However, it is not explained what is prohibited in the case of outsourced workers.

The article only mentions work under a fixed fixed time contract, not a fixed time. Article 66 of the law reads as follows:

"The working relationship between the outsourcing company and the workers or laborers they employ is based on a certain time agreement or an unspecified agreement".

Outsourcing Advantages

Outsourcing is defined as the business practice of using third parties to do work in a particular field. And this practice is likely to have several benefits, including:

A. For the Company

As a user of outsourcing services, the company will get the following benefits.

• Save training costs for employees

The main advantage of outsourcing is that it can be a company strategy to reduce operational costs. Because outsourced employees already have the special skills that the company needs.

In this way the company can reduce the employee training budget.

• Can increase focus on business

The next benefit of outsourcing is that when companies use outsourced personnel, they no longer need to worry about technical work that is not directly related to their core business.

Because later, the outsourcing company manages the search for employees, induction and allocation of recruitment for certain tasks.

• Hiring reduction

Finally, the advantage of outsourcing is that all matters relating to employee selection are also taken over by the outsourcing company.

At the same time, companies that need outsourcing services can immediately attract selected employees from outsourcing companies.

B. For Employees

As an outsourced employee you will receive the following benefits.

• Add skills

Many companies need outsourcing because they are considered experts in their field. So, in the SOP, outsourcing companies require their employees to receive various training.

• Easier to grow

Another advantage of outsourcing work is that the free and flexible nature of work allows you to progress more easily.

• Can expand to become an entrepreneur

For those of you who are entrepreneurial, outsourcing is one way that can help you achieve this. In addition to more free time, you can also benefit from the knowledge gained from training programs at outsourcing companies.

• Acquiring special skills

Being outsourced means you get training that will make you a specialist. And usually companies directly look for people with this special knowledge for outsourcing companies.

• Easy recruitment

For fresh graduates, registering with an outsourcing company is a quick solution to getting a job. This is because the recruitment process is relatively easy.

Outsourcing Disadvantages

The use of outsourcing also has weaknesses that can impact both the company and the employees themselves. Here are some of them.

A. For the Company

In addition to the advantages, this system also has disadvantages for companies that use it, as follows.

• Dependency risk

This can happen when there is a system or procedure that is kept secret by the outsourcing company, in this case the outsourcing company cannot know about it.

Therefore, only outsourced work can be the solution to get the job done.

• Employment contracts are usually short

These short work contracts have become difficult for the company. Because they often have to extend contracts or look for new employees in other companies.

And when they decide to recruit employees from a new institution, they risk a long process and transition.

B. For Employees

This practice also causes several disadvantages for workers, including:

• Working hours are not clear

Even if there is an employment contract, termination of employment can be carried out at any time and termination of employment still occurs frequently among outsourced workers. And if the working hours are long enough, but the salary is insufficient, it is also a loss for employees.

• Narrower career path

Of course, for those of you who have ambitions and want to pursue a career in the world of work, outsourcing work may not be an option. Because outsourcing employees do not have a clear career path.

• Welfare is not considered

Unlike regular employees, companies usually don't offer many benefits to outsourced employees. So this causes low welfare of outsourced workers.

• Uncertain income

Finally, workers are often paid low wages, and many companies are not transparent about how they pay their workers.

Ultimately, the outsourcing company benefits the most from this practice.

Examples of Outsourcing Jobs

Some examples of what outsourced employees can do are:

• Call center clerk.

• Courier or driver.

• Manufacturing workers.

• Janitor.

• Security.

• Facility management officer.

• Type of work outsourcing

• Manufacturing outsourcing

That's a complete discussion of the importance, rules and advantages and disadvantages of outsourcing for companies and employees. Since outsourcing is a promising work practice nowadays, participating in it can be a great option to increase your income.