Re: Outsourcing

Subject: Re: Outsourcing
From: Sue Heim <SUE -at- RIS -dot- RISINC -dot- COM>
Date: Fri, 7 Jul 1995 15:32:19 PST

Arlen provided us with his definition of outsourcing:

<snip>
> Outsourcing means a company is taking a function that has to this point been
> performed within the company and is hiring someone from outside to do it,
> instead. Sometimes it can mean what happened to your departments; often it
means
> hiring an already existing firm to do the work, instead. Sometimes, as in your
> case, the employees will be hired back as contractors, other times they will
be
> hired by the firm which is taking over the function, and still other times
they
> are simply let go.
<snip>

I've seen this layoff-syndrome before (being laid off, and then hired
back as a contractor for maybe the same $$ but less bene's). At any
rate, a company that is looking to downsize or reduce overhead may do
this, as the $$ paid to the contractor comes from a different budget
than do salaries. This allows a company to show less $$ being spent
in overhead, thereby reducing the cost-of-sales (is that right?). At
any rate, I've worked for three companies who did this -- laid me
off and then offered to hire me back. Only one company did I
actually work for again, but I was a real brat and upped my asking
price by lotsa dollars (I showed them!! <grin) to cover the loss of
benefits. Funny thing... they paid even more money for me and didn't
blink an eye!

...sue
sue


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