Ethical Considerations of Outsourcing to Another Country
Outsourcing has become a common business practice in today’s globalized economy and with the rise of inflation worldwide, it’s vital to consider if outsourcing firms are paying their employees’ fair wages and fostering an ethical workplace.
In many lower-economic countries like the Philippines, outsourcing firms are typically known to over-work and underpay their employees. A 2018 study by the Philippine Statistics Authority found that around 40% of workers in the country were paid less than the minimum wage for their region. This highlights the importance to work with an ethical outsourcing company such as Fair Trade Outsourcing, who not only pay their employees above the standard wage but also help to turn them from wage earners to capital owners and lift millions out of poverty.
Outsourcing is a fantastic way to save costs, increase efficiency, and access specialized skills and expertise, although, it’s crucial that you consider the ethical side of the business.
Here are some key ethical considerations to consider when outsourcing to another country:
Exploitation
One of the main ethical concerns surrounding outsourcing to low-wage countries is the issue of exploitation. Many workers in other countries are paid significantly less than their counterparts in developed countries. This may be subject to poor working conditions, longer hours, and limited benefits. As a result, this can lead to exploitation, as companies take advantage of the lower wages and relaxed regulations in these countries to maximize their profits.
Although, exploitation is real and common to encounter, there are many outsourcing services go above and beyond like Fair Trade Outsourcing.
At Fair Trade Outsourcing, we invest in each employee with fair salaries, health insurance and education to help empower their employees. To date, Fair Trade Outsourcing has lifted more than 6,000 people out of poverty and reduced economic insecurity in developed countries from employment.
Local Economy & Community
Another ethical concern to consider is the impact that the outsourcing provider has on the local economy and community. Outsourcing companies such as Fair Trade Outsourcing, have positively impacted over 5,650 people, 140 students, 1,000 agents and 4,500 dependents which is expanding at a rapid rate.
When an outsourcing firm is committed to supporting local communities and economies, you know they are ethical in their business operations and will be transparent throughout the process.
Code of Conduct
What can companies do to address the ethical considerations of outsourcing? One option is to adopt a code of conduct that outlines the company’s commitment to ethical practices and standards. This code of conduct should outline the company’s expectations for working conditions, wages, and benefits, as well as its commitment to environmental responsibility and cultural sensitivity.
Additionally, companies can also consider partnering with local organizations and stakeholders in the low-wage country. This is to ensure that they are aware of local customs and traditions and to address any concerns or issues that may arise. Further, companies can work with local organizations to help improve working conditions and promote further economic development in the community.
Lastly, companies can also consider implementing a third-party auditing system to ensure that they are complying with their code of conduct and to identify any potential ethical issues that may arise. This can help to ensure that the company is being held accountable for its actions and it can help to prevent exploitation or other unethical practices from occurring.
Working with an outsourcing company in another country can bring many ethical considerations that must be carefully reflected. By looking to see if an outsourcing firm pays their employees fairly, supports the local community and economy and has a strict code of conduct, you will be able to ensure you’re working with an ethical company. If you want to learn more about outsourcing ethical back-office and customer engagement services, contact our friendly team at Fair Trade Outsourcing.
