Outsourcing has become a way of life in the engineering community as most OEMs continue to farm out work both domestically and overseas. With years of experience in outsourcing now under their belts, companies seem to have a better sense of where they’re willing to take the risk of handing over design, development, and manufacturing to others.
“Outsourcing is here to stay, but the extent to which companies outsource will ebb and flow as the right balance is found,” remarked one engineer. “Some will find outsourcing is not worth the hassle. Others will make it work, largely to fill holes in engineering staff.”
Companies have also been burned by outsourcing. “Many times, design outsourcing has been a waste of significant time and money,” said one critic of the practice. “Most outsourced designs have not met time schedules and have not provided a final or adequate output at the end of the expenditure. These projects were then brought back in-house, behind schedule and in an almost start-from-scratch state, creating new pressures on an already overloaded engineering team.”
In addition to its spotty track record, most survey respondents believe outsourcing makes fewer engineering jobs available and lowers employee morale. What’s more, better than four in 10 think outsourcing drives down salaries for new engineering hires and limits opportunities for advancement for those already on board.
“Outsourcing lowers engineering wages, devalues engineers, places unfair competition with vastly different economic cultures, and potentially forfeits IP to foreign competitors,” declared one disgusted respondent. “Plus, it costs more to manage and presents more problems than most companies realize—until it’s too late.”
Paradoxically, despite the fact that 56% of respondents said that outsourcing results in fewer engineering jobs, most deny that it has affected them personally. Seven out of 10 say they aren’t concerned with the prospect of losing their job to outsourcing, while 14% maintain their skills are valued more than before. Nearly 20% claim that outsourcing gives them the opportunity to work on more innovative projects, since more routine tasks have been moved out of the organization.
“When done for the right reasons—to get skills unavailable internally or to significantly reduce costs for the same or better quality of work over the entire product life cycle—outsourcing is totally appropriate,” noted one pragmatic observer. “When it’s done simply to save a few dollars so the company can meet quarterly numbers, I think that it’s ultimately damaging to a company in the long term.”
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