Negative Effects of Airline Outsourcing

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Negative Effects of Airline Outsourcing Negative Effects of Airline Outsourcing There are many reasons why an airline may consider outsourcing in the airline industry, and it is becoming a popular thing to do. The result of the airline outsourcing its work to lower the labor cost is not always what it seems. The industry is heavily influenced by greed and competition. The airline’s thought on outsourcing is to place the core work currently being performed up for bid to a third party, and the lowest bidder is awarded the contract for performing the core work that was previously done by the airline. The third party, most of the time, is held to the same standards and results as the work that was previously done by the airline. This is usually the case in the airline industry because they are a customer service driven company. The third party, that was now awarded the contract, becomes responsible for meeting the goals that are set by the airline that made the decision to outsource the work. Consequently, when management makes the decision to outsource the workforce, the cost savings can be misleading at first. Often it will take some time for the negatives of the decisions to surface. By the time they are noticed, it could already be reflecting poorly on the airline and its reputation. A damaged reputation in the customer service industry can be very harmful and hard to recover from. From my experience, an outsourcing company hires at lower wages and less benefits to help keep the cost down. This in return discourages the, “career employee,” and creates a higher turnover rate. For instance, when the third party hires inexperienced employees, this will initially cause higher training cost for the company, and at the same time be a repetitive cost due to the high turnover rate. Also, these inexperienced employees have a higher risk of damaging equipment and
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