Companies often look beyond their dedicated employees and even their home country's borders for cost-effective arrangements. Outsourcing various departments like IT or human resources is often an arrangement that benefits the bottom line and impacts those people whose jobs are no longer needed. If you're interested in outsourcing your manufacturing operation, a range of pros and cons will accompany your decision.

Major Benefits

• Companies that outsource components of their manufacturing process often do so to areas where skilled labor can be obtained for significantly less in wages and benefits than U.S. workers and labor unions regularly demand. These countries often offer construction and tax incentives for relocating an operation there, too, and sometimes, regulations pertaining to things like environmental safety and bookkeeping are significantly more lax than American standards. The cheaper labor also allows some companies to add to their workforce without increasing expenses. You'll have the opportunity to pay these new workers more than they've ever made but still less than you paid before.

Residual Benefits

• According to "Entrepreneur" magazine, a company that outsources certain departments not directly pertaining to the general mission, like IT for a shoe company or motor manufacturing for a designer of time clocks, is able to focus its dedicated workforce to the components of the business most crucial to the company's development, such as sales and research. Having fewer workers at your stateside locations allows you to devote more space to other operations --- and maybe more dough for your stakeholders.
• Outsourcing your manufacturing operation can cause headaches, too --- not just for you but your staff and the community as a whole. Some companies have laid off hundreds or thousands of stateside workers as they outsourced their manufacturing departments. This wreaks havoc on the people you'll have to fire, some of whom may have invested an entire career with your company. These layoffs decrease local, state and federal tax revenues, as well as grow the unemployment rolls, for which taxes pay. If the employee can't find new work, his family may leave behind another boarded-up foreclosed home to stain the American landscape.

Minor Problems

• The tax on your neighbors and staffers is just one price you'll pay to outsource. You'll be putting your brand and product --- at least a portion of it --- into someone's hands with whom you may have an impeded flow of communication, often due to language or cultural differences. These new workers will make part or all of the products on which you've built your image and reputation, at a location where you can't directly supervise them. American boycotts have occurred after some companies have emptied out stateside factories;  investigations into child labor or negative press about environmental oversights could tarnish your long-polished brand name.