Introduction
The US idea of insourcing jobs back into the country is a right direction. Moreover, bringing back of jobs to the state will increase the number of investments and capital. Also, it will increase the number of employment opportunities in the country thus rendering the economy and workers productive and creative. Bringing jobs back is also a good move for the US because it is an added advantage to the Government revenue and the economic growth.
Reasons Why American Companies Move Back Jobs
Insourcing brings lots of improvement to the lives of the Citizens and the country’s economy. The US decided to bring back jobs from other nations to create employment for the people and making them useful and productive (Schniederjans, Ashlyn and Dara 110). Also, insourcing ensures the viability of key assembly firm in the US. Therefore, increasing the number of job availability in the state. The government motivation to bring back jobs is to boost the economy and to make the country stand out from its competitors. Insourcing leads to the expansion of subsidiaries this is by building new facilities or additional capacity to the already existing facilities (Slaughter 3). Also, a branch can be made if a foreigner has ventured into a business in the US or merged with a part or the entire business enterprise that already existed. Furthermore, the government benefits from firms within the country and the foreign companies invested in the US.
America is also insourcing jobs back to the country because they are not getting much profit in outsourcing their products and businesses as they had expected. Also, the US have realized that although there are low labor costs in places like China, companies incur more losses due to high costs of transportation and that the transportation costs them much more than they had anticipated. Moreover, the companies want to introduce regularly new products to the market but due to the distance of the overseas business and the US it makes it impossible (Monczka 20). Additionally, the production and supply of goods are efficient and flexible. Enterprises that have insourced their jobs back create quality products and also the speed in marketing has also increased because companies are situated in the country. The auditing of the business is also made easier because the manager has full control of the business unlike when the company is in other nations (Jackson 3).
Insourcing in America brings back the US economy investments in physical capital, R&D (research and development), trade links and the general management and organization (Jackson 2). These investments profit the initiatives and also the economy at large through the consumers, sellers and competitors. Reasonably, the government and the companies should invest in what the country is known to do best for the promotion of local development. Also, the aim of insourcing is for the country to have the ability to compete with other nations regarding production costs and the leveling of field labor cost in the US (Schniederjans and Zuckweiler 976). Furthermore, the introduction of placing business in the US has made the business services marketable globally thus increasing the country’s economic growth rate.
The expansion of facilities has led to a grand increase of firms in the industry. For the success of businesses in the country, the government has expanded the tax credits for the companies based themselves in the United States (Monczka 20). Also, increasing the level of the workforce to the companies situated in the US. Insourcing also brought about the investment of research and development which aims at discovering new products and also improvement of the existing ones. Notably, insourcing companies have led to the capital increase to 10.4 percent which is a double increment from 52.8 billion dollars to 111.9 billion dollars (Dibbern 203). The capital increase for the country justifies that insourcing in the country is profitable. Likewise, insourcing enables the production of goods in the US for world market because the living standards of US citizens depend on international trade.
Reasons Why Insourcing Jobs is not A Good Idea
Insourcing might affect the program of business. Regarding market control, insourcing has proven to be unfavorable because the supervision of the firm might need increased workforce (Chapman, Kathleen, Andrade and Kathleen 24) Also, lose of time spent in tackling insourced projects would lead to poor performance in the business activities sector. Furthermore, starting and planning of business in the country may be expensive regarding resources, purchasing of new equipment and searching for employees with the qualified skills (Finch par 3). Also, additional activities on employees may become stressful to them and end up making them unreliable and inefficient. Additionally, there might be an added expenses related to the construction of insourcing and the customer facility duty. Also, there might be the production of low labor costs in countries like China, Japan, Mexico, and India (Fishman 11).
Examples of Companies Shifting to Insourcing
AmFor Electronics- the company, insourced wire harnesses production from China and Mexico.
Rolls-Royce- a company that deals with crosspoint plant which produces an aero engine for both aircraft and Boeing.
Keen a footwear designer switched from China to Portland, Oregon
US Airways that has insourced 400 jobs back into the country (Carmel and Ritu 634).
In conclusion, countries that insource their businesses back into; the state benefits in all sectors. Insourcing creates employment for the citizens of the US and also makes their living standards better. Also, insourcing increases the government revenue due to the number of investments made in the country by business within the country and outside investors.
Works Cited
Carmel, Erran, and Ritu Agarwal. "The maturation of offshore sourcing of information technology work." Information systems outsourcing. Springer Berlin Heidelberg, 2006. 631-650.
Chapman, Robert B., Kathleen R. Andrade, and Kathleen R. Anadle. Insourcing after the outsourcing: MIS survival guide. American Management Assoc., Inc., 1997.
Dibbern, J. "The sourcing of software application services: empirical evidence of cultural." Industry and Functional Differences. Physika-Verlag, Reihe, Information Age Economy, Berlin (2004).
Finch, Carol. Advantages and Disadvantages of Insourcing. 2016. Web. 12 April 2016.
Fishman, Charles. "The insourcing boom." The Atlantic 28 (2012).
Jackson, James K. "Outsourcing and insourcing jobs in the US economy: Evidence based on foreign investment data." (2013).
Monczka, Robert M. Purchasing, and supply chain management. Cengage Learning EMEA, 2010.
Schniederjans, Marc J., and Kathryn M. Zuckweiler. "A quantitative approach to the outsourcing-insourcing decision in an international context." Management Decision 42.8 (2004): 974-986.
Schniederjans, Marc J., Ashlyn M. Schniederjans, and Dara G. Schniederjans. Outsourcing and insourcing in an international context. Routledge, 2015.
Slaughter, Matthew Jon. Insourcing Jobs: Making the global economy work for America. OFII, 2004
