What Does 'Subcontracting' Mean?

Category: Glossary, Type: Other

The Meaing of Subcontracting

Subcontracting, also called outsourcing, is the hiring that an organization makes of other organization, so that the latter performs part of services for which the first organization was directly contracted. To fix the gas leak, the organization has outsourced to other organization that will execute the breakage and survey of pavement to find and accurate the location of gas leak.

This form of subcontracting often happens in case where it's essential to resort to specialized labor in some subject, so the most common is to hire only personnel, as the resources 'installations, hardware, software' will be supplied by the customer, or on the another hand, moreover to hiring personnel, resources are also hired. For example, an organization dedicated to carrying out demolitions can hire an organization that's solely responsible for gathering the waste that produces a demolition.

In some way, subcontracting or outsourcing is based on enhancing a sure service, so that it, on an international or internal level, can be highly competitive.

However, like any policy, in case of decisions, the decision to outsource an organization often presents voices for and against.

Those who proclaim against it speak of lack of loyalty that exists between outsourced employees, as they are not employees of organization that definitively supplies the service; other inconvenience is the proliferation of work contracts, which inevitably undermine working conditions. Finally, outsourcing is often the cause of elimination of posts work.

And in relation to voices absolutely in favor of outsourcing, they often rely on reduction of costs and capital that it represents, on utilize of competitive practices and on its continual improvement.

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Category: Glossary, Type: Other