Human Resource Problems

Outsourcing is a very heavily debated human resource practice. Business segments typically outsourced include information technology, human resources, facilities and real estate management, and accounting. Many companies also outsource customer support and call center functions, manufacturing and engineering. The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of labor, capital, technology and resources. Tennis Shoe and athletic apparel manufacture Nike has encountered numerous inquires into their HR's practice of outsourcing to contracted factories in Asia (www.american.edu).

The latest issue with Nike's labor practice audit of a Vietnamese factory which outlined overtime violations and an excess level of toxic fumes in the workplace. Nike is characterized of making its equipment in countries which are in the developing phase, having very cheap labor, authoritarian government, lack of human rights appeal and union movement. In doing this it has made greater margins on the cost of mere cents to its workers. When Nike was getting pummeled on the subject in the 1990s, it typically responded with anger and panic. Executives would issue denials, lash out at critics, and rush someone to the offending supplier's factory to put out the fire before it spread. Since then, Nike has constructed an elaborate program to deal with labor issues in the 900-odd supplier factories (none owned by Nike) that churn out its products in some 50 countries (www.american.edu).

In Conclusion, Management challenges will grow more as rising global salaries dissipate the easy cost gains from offshore outsourcing. The winning companies of the future will be those most adept at leveraging global talent to transform themselves, their industries, and creating better jobs for everyone. To address Nike's HR's issues they've incorporated a staff of 97 individuals that inspect several hundred factories a year, grades them on labor standards, and works with managers to improve problems. Nike has now allowed random factory inspections by the Fair Labor Assn(www.american.edu