Does outsourcing help or hurt?
Usually this is done for financial reasons and there’s nothing wrong with that.
Done incorrectly though it can pretty much destroy your culture.
Outsourcing activities outside your core can work well. You don’t screw with your team at the heart of your strategy but you don’t absorb legacy costs by hiring a lot of employees in an area that is tactical.
But what if you try to outsource employees that might be at your core competency and displace current workers? To say this can screw your culture would be an understatement.
Take a look at what Disney tried to do by moving some of its key tech workers off the books and replace them with contractors from an outsourcing firm. When the crap hit the fan Disney decided to scrap the idea.
The problem is that even though the idea has been scrapped I would say Disney’s workers have a large hunk of distrust for the organization and this won’t go away soon.
Pay attention to your outsourcing strategy and for freaking sake please think beyond the potentially short term cost benefits to the longer term health of your firm.