Austria     Belgium     Brazil     Canada     Denmark     Finland     France     Germany     Hungary     Iceland     Ireland     Italy     Luxembourg     The Netherlands     Norway     Poland     Spain     Sweden     Switzerland     UK     USA     

Defeating the outsourcing demon (Part 1)

The business world is facing a major dilemma over the extent of globalisation and internationalisation and how to translate them into concrete business practices. The more competitive a market becomes, the greater the need for companies to attract the best professionals. For some time, almost all companies have been thinking about how to own, acquire, and retain these experts. Then, they reach a level of expertise where they can no longer solve a task with internal capacity, with traditional employees, and are “forced” to bring in external resources. Although the world has been clearly moving in the direction of outsourcing for decades, many people are still completely averse to its use. But while it was a matter of choice even ten years ago, it is now clear that unique expertise, at its highest level, can only be obtained in this way. Moreover, the pandemic has given this trend a major boost in the last two years.

The price of freedom

When outsourcing first emerged, the reasons and motivations behind its creation were quite different from those that now characterise this form of cooperation. It was not only exceptional professional skills, or even, in the first instance, the reason why professionals decided to leave the corporate framework and set up their own company or join forces to form a new company. The reason was the personality and character of these professionals, since they all had in common that they wanted to work more freely, avoid monotony, have flexible working hours, and get rid of their bosses as their primary goals. This was mostly expressed in terms of wanting to feel better, but these were generally the basic conditions for feeling good. It also required a significant dose of entrepreneurial spirit to get started, as well as self-confidence. In many cases, overconfidence, ego, and overestimation of one’s own abilities were the driving forces behind outsourcing ventures. As a result, their perception of the market was also ambiguous. On the one hand, partners appreciated that these firms could bring in a vision that their own internal human resources were not capable of. They tend to be faster, more creative, and have more unique skills. However, in terms of reliability and predictability, they have fallen well short of expectations, so the business world has been quick to label this new direction as “unreliable”, and they have not been wrong by much. The problem was that it was the trend itself, this form of collaboration, that was judged in this way, rather than the particular companies and the representatives of the early era. Then outsourcing companies, realising this problem, tried to put a lot of effort into trying to appear more reliable and systematic, but this was more in the form of communication and appearances, because the characters themselves who choose this path have not changed. They had a place in the market even then, of course, but they were also scaled down to an appropriate level, and if you really expected perfection, you did not look for outsourcing solutions.

The home office monster

It is not surprising, then, that when all the technological conditions were in place to allow more and more work to be done from home, employers almost completely turned their backs on the possibility. On the one hand, we are talking about personalities, and our personality traits define our business decisions to a large extent, hence most characters stick to the solutions they already know. On the other hand, by this time, we had an unpleasant experience, which could be immediately cited as an excuse for a decision point. Moreover, in addition to our personalities, generational influences clearly determine our attitudes, and older generations are generally not enthusiastic about such changes. Of course, this is not true for all older decision-makers either, but generally speaking, generations who have been socialised to go to work in the morning, “pick up work” and then “put it down” and go home at the end of the working day, find it very difficult to move in the direction of merging work and private life. Since they themselves do not want this, they naturally impose this wish on the whole organisation, on all employees. So, in the event of a move to a home office, they are on the alert and try to find every little flaw. And we know that if we are concerned with finding a fault, we usually find it. And then, we have a perfect reason to stick to the tried and tested methods. Even when the market has clearly been left out of the search for the most talented young workers, it hasn’t come to its senses. Even when the number of applicants for a particular position was zero, the labour market was oversupplied. ,At least that is what they heard in the analysis. What they didn’t notice was that there were companies with an abysmal level of over-application for a particular position. This information would no longer have helped to support the “we do everything well, but young people…” image that had been beautifully built up over the years. Thus, the best workers were discarded, outsourcing was not relied upon, which means that these companies – usually from The Precisionists and The Authoritarians generations – and thus a large part of the companies run by decision-makers born before 1973, are now stuck in the past. Even before the pandemic, there was evidence of progress, but typically it was small and far below market potential. Which was also difficult to measure, of course, because everyone there was bending over backwards.