Europeans open to outsourcing
Europeans are becoming more open to outsourcing, according to a Ernst & Young study, which found that outsourcing was being used by 70% of the European firms surveyed.
Compared to 70% of respondents that had at least one outsourcing relationship, only 49% of respondents cited cost savings and higher productivity (revenue earned per employee) as the advantage of outsourcing for their organisation. About 33% identified better quality through use of specialised skills.
“In order to achieve an overall reduction in costs, employers must be able to either successfully reallocate internally those staff whose operations have been externalised, or carry out redundancies. The options available to employers vary according to each country’s legal framework. European countries such as France and Germany have less room for maneuver than countries such as the UK, where labour laws are more liberal,” said E&Y authors Thierry Muller and Paul Young,
The French are likely to be more reserved than their British counterparts when it comes to adoption of outsourcing,
The British are, however, likely to outsource only a few standard functions, while the French and Belgians are open to outsourcing a wide range of functions. “French companies attribute less importance to cost-saving benefits, with improvements in quality and strategic organisation being the key advantages identified. Belgian companies are also strong proponents of the improved quality brought by outsourcing, while in the UK, quality considerations are rated on a par with cost savings,” the study said.