A Detailed HRM Report on Offshore Outsourcing vs. Contingent Workers

This report provides a comparative analysis of offshore outsourcing and contingent workers, evaluating their respective pros and cons, with a specific focus on offshore outsourcing to Brazil. It delves into the legal and ethical considerations associated with both workforce models, including the challenges and opportunities presented by Brazil's labor laws and the utilization of H-1B workers. The report recommends offshore outsourcing in Brazil as a potentially beneficial strategy, citing the country's skilled labor force and cost-effectiveness, while also acknowledging potential issues such as communication barriers and political instability. The analysis includes strategies for effectively managing contingent workers and mitigating potential problems in offshore outsourcing, ultimately concluding that offshore outsourcing in Brazil offers a robust platform for business growth despite existing challenges.

Running head: HRM
Offshore Outsourcing vs. Contingent Workers
Name of the student:
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Executive summary
The main purpose of this assignment is to identify and recommend the best of offshore
outsourcing and contingent workers to the case study company. The study identifies both the
pros and cons of offshore outsourcing and contingent workers. Based on an effective discussion
this study identifies offshore outsourcing in Brazil as the potential decision to go with. This
move can be helpful in terms of receiving quality service at a relatively reduced cost than the
existing market.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Pros and cons of offshore outsourcing.........................................................................................3
Pros:.............................................................................................................................................3
Cons:............................................................................................................................................4
3. Recommended steps to minimize the potential for problems with offshore outsourcing...........4
4. Any legal and ethical concerns with offshore outsourcing..........................................................5
5. Pros and cons of using contingent workers.................................................................................5
Pros:.............................................................................................................................................5
Cons:............................................................................................................................................6
6. Strategies for the effective use of contingent workers.................................................................6
7. Any legal and ethical concerns with using contingent workers, particularly regarding H-1B
workers............................................................................................................................................7
8. Conclusion...................................................................................................................................8
References........................................................................................................................................9

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1. Introduction
The main purpose of this assignment is to discuss and identify the better of two kinds of
the workforce, “Contingent Workforce” and “Offshore Workers”. The purpose of this discussion
is to recommend the case study employer on using a contingent workforce and offshore workers.
A contingent workforce is a form of the labour pool that is increasingly growing to the popularity
and are predominantly hired by the organisations. They do it to be capable to meet the rising
market demands (Horne, Williamson Jr & Herman, 2018). Offshore workforce, on the other
hand, is a labour pool that is globally based in offshore locations and take care of the outsourced
activity (Willcocks & Lacity, 2016). The purpose is being served by discussing the pros and cons
for either of the workforces. Moreover, they are also being analysed from legal and ethical
perspectives.
2. Pros and cons of offshore outsourcing
Pros:
This allows saving on manpower and the training costs. In the context of Brazil, this is
even more perspective as the country is able to nurture skilled labours in its growing outsourcing
industry (Gurung & Prater, 2017). Moreover, this also helps to avoid expenses being made over
purchasing new technology. They are actually accessing the superior technology of offshore
locations. It allows the employer to have an enhanced focus on their core business. This also
includes focusing more on process re-engineering, strategic thinking and managing partner
relationships in trades. It allows accessing to specialised people at a fraction of the cost. One of
the motives of offshore outsourcing is to access the cheap labour cost. Freelancers or
independent workers those who work part-time create this opportunity for the client. Due to

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being able to put an enhanced focus on the core business, the employer will be able to improve
their product and service efficiency, and also their customer satisfaction rate. It causes to reduce
overheads significantly. It enables to effectively control the operating costs. The outsourced
business domains will no longer require expenses being made overtraining and development, and
other operations from the client company (Jabangwe, Šmite & Hessbo, 2016).
Cons:
Communication is one of the downsides of offshore outsourcing. There can be
communication barriers such as language gap. There is a range of understanding issues like
technical understanding, aural understanding, cultural understanding and design interpretation.
There is high competition between offshore outsources leading to excessive practices of offering
second rate job to the client. Time differences can be both an opportunity and an issue. It is a
prospect when offshore locations are running behind to the employers' location with respect to
time. This will help the project to be completed prior to the deadline. However, at times there is a
communication gap between the employers and offshore outsources. This may delay the process.
The greatest downside of offshore outsourcing is to identify the correct set of the project team
(Rost, 2016).
3. Recommended steps to minimize the potential for problems with offshore outsourcing
There are some potential problems in offshore outsourcing to Brazil. This includes but
not limited to a lack of political stability, language problems, a high crime rate and perception of
macroeconomic stability (e.g. unstable currency) (Peck, 2017). The challenges of outsourcing to
Brazil can be overcome in several ways. Labour laws should be modified, which have been
affecting Brazil's capability to emerge as the leading nation in providing outsourcing services to

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the client. Due to the unfavourable labour laws, there are constraints on firing workers.
Moreover, there are restrictions imposed on hiring temporary workers (Peck, 2017). Trade
associations such as BRASSCOM can effectively conduct the regulatory correction thus realised
(Armando et al., 2016). In this regard, Brazil can take help from India's National Association of
Software and Services Companies (NASSCOM) (Kshetri & Kshetri, 2017).
4. Any legal and ethical concerns with offshore outsourcing
As stated earlier under recommended steps, labour laws are very strict that affect Brazil’s
potentiality as an offshore outsourcer. Brazil, unlike China and India, has skilled workers serving
in outsource businesses. Despite this being a fact the laws are not very favourable and do not
promote hiring temporary workers and firing workers. This has emerged as one of the barriers to
the growing Brazilian outsourcing industry (Antoniolli et al., 2015). It is to be noted that
temporary workers or freelancers are becoming an asset to the companies. It is due to many
reasons. They agree on working for a lower wage. They create staffing flexibility for employers.
They operate the whole day and night for every single day in a year (Antoniolli et al., 2015).
5. Pros and cons of using contingent workers
Contingent workers are considered “Temporary Staffing”. They have a variety of forms
like freelancers, consultants and independent contractors. Contingent workers actually represent
a larger share of the entire workforce.
Pros:
Contingent workers can effectively help in lowering the cost. They are less paid than
regular or permanent employees. Their numbers are also growing in companies across the globe.
If it continues this way, will further reduce the overall spending on employee wage. Contingent

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workers increase productivity. They pick up urgent and complicated tasks to be able to maintain
a long-term relationship with the employer. This creates an asset for the company as the
employers can drive their contingent workers under urgent circumstances. Contingent workers
offer to staff the flexibility to the employer (Simms & Dean, 2015). For any complicated task,
the employers will generally approach their trusted in-house employees. In case the in-house
employees are packed with tough schedules the employers can approach their contingent
workers. On the other hand, in a case when the contingent workers have done something wrong
the employers can reach to their in-house worker to get the job done. By allocating a substantial
amount of tasks to contingent workers the employers can focus on their core businesses.
Contingent workers can remain available to the work for 24*7 format. It creates an extra
business opportunity to employers (Simms & Dean, 2015).
Cons:
The employers used to have reduced control over their contingent workers. They can
refuse the task and set their own working hours. These things should be managed; however, it
generally does not happen due to the employers’ reduced control on the contingent workers.
There are commitment and loyalty concerns with contingent workers. The contingent workers
can work for more than one employer at a time making them least loyal to their employers and
more to their self-purpose of the job (Simms & Dean, 2015). There can be a conflict of interest
or breach of confidentiality. Since they work with different employers they are also able to
identify the differences in the work environment and monetary benefits. Lack of inclusion can
affect employee relations and their moral can also suffer. In some cases, few permanent positions
are replaced with contractual workers. In all such cases, if contractual workers are asked to do

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similar works as that of permanent workers but are underpaid, they may feel uncared. Their
morale will be affected.
6. Strategies for the effective use of contingent workers
Effective utilisation of contingent workers can be accomplished in various ways.
Contingent workers should be hired based on clear objectives of the move. This means
understanding why contingent workers are needed to be recruited. Is it just to fill the
performance gap as one of few permanent employees are underperforming or else. Contingent
workers should be hired once the problem situation is known to the management. The employers
should have enhanced control on their contingent workers. This can be fulfilled with technology
such as contingent labour management software programs (DuRivage, 2016). This technology
can be helpful in knowing the specialisation of workers, tracking their work progress, allocating
them tasks, monitoring, managing and making them the payment.
7. Any legal and ethical concerns with using contingent workers, particularly regarding H-
1B workers
There are many legal and ethical concerns related to using contingent workers.
Contingent workers may or may not receive fringe benefits. They will have to fight for such
benefits themselves. There can be some dispute based on payment and many other things. The
list of legal and ethical concerns also include H-1B workers. The H-1B is a kind of visa in the
United States that falls under the Immigration and Nationality Act (Peri, Shih & Sparber, 2015).
Using this Act the US employers can temporarily employ foreign workers in and across a list of
occupation such as specialty occupations (Mayda et al., 2018). Contingent workers having an H-
1B visa can face some issues as listed under (Amuedo-Dorantes & Furtado, 2017);

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 There is no assurance whether workers will be allowed to enter the country back-and-
back again
 Passport carrying with valid visa is mandatory all the time
 Workers cannot work with multiple employers
 One must always earn more than the minimum required amount to be able to manage
their daily expenses
8. Conclusion
To conclude, it can be said that working with contingent workers can be an option to go
with. This is due to the limited control of the employers on their offshore outsourcers. However,
the assurance of quality service can be affected by working with contingent workers. They can
have a casual approach to the tasks leading to damaging the quality of work. Brazil is very
different from other BRICS nations such as India and China in terms of providing a quality
workforce to its client. Apart from some political and legal challenges in the country Brazil
provide a robust platform for outsourcing. The case study company should go for offshore
outsourcing in Brazil rather than contingent workers. Despite the barriers such as
communication, outsourcing in Brazil should deliver both on quality and cost aspect of the
business.

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References
Amuedo-Dorantes, C., & Furtado, D. (2017). Settling for Academia? H-1B Visas and the Career
Choices of International Students in the United States. Journal of Human Resources,
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Antoniolli, P. D., Ferreira, J., Jesus, V. C., Argoud, A. R. T. T., & Júnior, J. B. C. (2015).
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Jabangwe, R., Šmite, D., & Hessbo, E. (2016). Distributed software development in an offshore
outsourcing project: A case study of source code evolution and quality. Information and
Software Technology, 72, 125-136.

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Kshetri, N., & Kshetri, N. (2017). Cybersecurity in India: Regulations, governance, institutional
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