Careers In A Outsourcing Company: Is It Worth It?

Many international students are both familiar with and unfamiliar with positions in outsourcing companies. Such positions are common in the job market, and in recent years, there has been an increasing trend. There have been reports that the percentage of outsourced employees at companies like Google has exceeded that of regular employees, reaching tens of thousands. Even in some companies, work areas are specifically designated for outsourced employees.

What are outsourcing companies/positions? Are these outsourcing positions worth pursuing? What are some things to consider? This article will address these three questions regarding outsourcing positions.

What Do Outsourcing Companies Actually Do?

First of all, outsourcing can take two forms, one is labor outsourcing, often referred to as labor dispatch, and the other is project outsourcing. These are two entirely different concepts.

Labor dispatch involves being sent to a corresponding employer as a short-term worker. In this case, you are an employee of a labor outsourcing company and are "loaned" to employers like Samsung or Singapore Airlines to provide short-term services.

Why does labor dispatch exist? For example, some large companies want to try non-core business areas, but they are unsure of the potential returns. If they hire employees directly, the cost is high, and there are risks associated with what to do with these employees once the project is completed. In this scenario, companies may choose to collaborate with labor outsourcing firms, who help find people to do the work without establishing a formal employment relationship with these short-term workers. Once the project ends, there is no need to retain these employees.

Labor outsourcing companies are responsible for finding these people jobs at the next company in need of dispatched employees, and the cycle continues. This approach allows companies to control costs and minimize risks.

What is Project Outsourcing

Project outsourcing involves providing solutions to companies that lack specific professional capabilities (such as finance, technology, design, etc.). For example, a restaurant business may need to create an online ordering platform, which is not within their core expertise. In this case, they would hire a technology project outsourcing company to provide the necessary technical capabilities to build the project. As an employee of this project outsourcing company, you would provide technical services to fulfill the project's requirements. After the project is completed, you continue to serve one project after another as an employee of the project outsourcing company.

In summary, labor dispatch involves "selling" labor services and employment relationships, while project outsourcing involves "selling" the results and deliverables of projects.

Working for an Outsourcing Company

Whether you are in labor dispatch or project outsourcing, the experience of outsourced employees is generally different from that of regular employees.

For example, an outsourced worker in a certain company within the BAT group once mentioned:

In the company, there is a dedicated workspace for outsourced employees. They don't have official employee badges, can't go to other floors, or use the cafeteria and other facilities. Occasionally, during holidays, gifts are distributed separately.

Regardless of the type of outsourcing, you sign a labor contract with a third-party outsourcing company, not the company where you are working.

If it's labor dispatch, after a project at one company ends, you need to be dispatched to another company for an interview. Only after passing the interview can you continue working at the next company.

With project outsourcing, you will work on different projects depending on the project's requirements, and you may also need to be on-site at the corresponding company at times.

Key Differences Between Labor Outsourcing and Labor Dispatch

• Labor dispatch employees must adhere to the requirements and management of the host company. They also receive training provided by the host company.

• Project outsourcing employees primarily deliver project results, and unless otherwise specified, the client does not have the authority to manage or train employees.

Labor Outsourcing in Career Development

1. Lack of a sense of belonging

You are always an informal employee outside the company, and you leave after the project ends. The host company won't invest in your development, and the benefits are consciously separated from outsourced employees, leading to a sense of being in a temporary and less-favored position.

2. A transactional mindset 

You work for projects without long-term commitment, frequently switch roles, and may not be responsible for the project's long-term outcomes. This can lead to high repetition of tasks and a lack of in-depth skill development.

3. Lack of a Growth System

Most outsourcing companies do not have mature management systems. Employee turnover is high, and the probability of being retained after training is low. Companies prioritize cost considerations and often do not invest in employee development.

Compensation and promotion

Labor dispatch-type companies typically offer limited opportunities for salary increases since their profit model is based on headcount fees, which is the difference between the budget provided by the host company and the actual salary they pay you. To ensure profit margins, they often do not provide opportunities for salary increases. Project outsourcing companies generally offer more substantial compensation and promotion opportunities.

While outsourcing companies may have their disadvantages, the fact that a significant number of these companies exist and operate demonstrates that this business model continually adds value to society and gradually becomes more standardized. To attract talent, outsourcing companies often offer competitive salaries, higher than the market average, making them a transitional choice for many individuals, whether they are transitioning to a new career or entering the workforce.

In situations where job opportunities are limited, some individuals have no choice but to join outsourcing companies. However, they have found good career development in the long run. So, how do they make decisions and what is their perspective?

Tips on Joining Outsourcing Companies

1. Avoid a Transactional Mindset

As mentioned earlier, the most significant impact of outsourcing companies on employees is eroding the sense of continuous improvement in their work. Since they are the contracting party, they pay for project deliveries. Once the project is delivered, they are not responsible for how it runs, the impact it has, or the benefits it generates. Over time, this can lead to complacency and a lack of motivation to improve oneself.

Some programmers who transitioned from outsourcing to a top-tier company have emphasized that regardless of your work environment, you should never forget your ultimate goal. Dedicate yourself to improving your code, technical skills, and capabilities, especially in the early years of your career. Don't carry a transactional mindset into your work, and don't isolate yourself from other employees within the company just because you are an outsourcing worker. If you are on-site at a good company, seize the opportunity to learn and observe.

2. Define Your Phases in the Outsourcing Company

Some individuals choose outsourcing companies out of necessity. This includes situations where there are no better job opportunities at the moment, and the high salaries offered by some outsourcing companies can help alleviate immediate financial pressures. If you are transitioning to a new career and need a starting point, it's a reasonable choice. However, in the long term, because of a lack of promotion and coordination mechanisms, it remains disadvantageous to career development. If you choose an outsourcing company, you should plan your career development early. If it's a transitional move, decide how long you plan to stay and allocate time to find new opportunities during this transitional period.

3. Choose a Reliable Outsourcing Company

Before joining an outsourcing company, consider factors such as the company's registration period and the number of employees. Typically, a longer company registration period and a larger workforce indicate a stronger company. However, there are also reliable companies that are newly established, especially those with industry veterans. Your boss is crucial for your first job. During interviews, express your concerns about training, promotion, and development. Listen to how the boss responds and understand how they handle project deadlines and employee development.

4. Avoid a "Tainted" Mindset

If you aspire to work in an industry but lack experience, outsourcing companies provide an entry point for individuals who may not meet the required experience. You can gain experience, learn, and experience the industry atmosphere. If you have a deep desire for the industry but don't have the skills, consider starting with an outsourcing company. There are cases where individuals transition from outsourcing to regular employees at top-tier companies or obtain positions at leading companies. The key is your dedication and how actively you deal with these unfavorable factors. Avoid self-pity and hesitation.

Final Thoughts

As mentioned earlier, outsourcing companies continuously provide job opportunities in the market and serve as a starting point for many newcomers looking to enter the industry. It's essential to approach the pros and cons of outsourcing companies with a balanced perspective. Whether in an outsourcing company or a top-tier company, there will always be individuals who struggle with a transactional mindset and a lack of planning. Sometimes, it's not the environment that limits us but our own lack of self-motivation.