Is Your Company Ready for Outsourcing?

Outsourcing is expected to grow in the upcoming years as more and more companies choose to utilize outside vendors, firms, and freelancers to handle critical business operations, from accounting to website design. Deciding what to outsource and when to do so can be a difficult decision for an entrepreneur to make, especially if they’ve started the company from scratch.

Advantages

One of the main advantages of choosing to outsource is the savings from not hiring an employee. Employees come with all sorts of associated costs, from training to benefits and salary. However, a freelancer or outside firm will only need pay for the work done. If the outsourced task is not central to the companies operations – for instance, a garment company outsourcing its customer service – the business can sometimes save the cost of hiring an entirely new department.

As contractors aren’t typically required to come into the office, deciding to outsource can also lead to a broader range of potential candidates. Videoconferencing, online chat apps, and the abundance of free wi-fi allow for freelancers and independent contractors to work from anywhere. Once you lift geographic restrictions for candidates, it becomes a lot easier to find the most talented person for the desired work.

Disadvantages

Knowing whether a company is ready to outsource or not takes more than just looking at the potential benefits, however. Some disadvantages must be weighed before pulling the trigger on offloading tasks to outsiders.

For instance, entrepreneurs are not typically eager to hand off operations to anyone else, let alone someone who’s not even an employee. It’s true that outsourcing means giving up control, even though a company can provide instructions and point in the right direction. The lack of control may lead to a possible dip in expected quality. Again, if the outsourced task isn’t central to the success of the business, the lower quality may be acceptable. However, if the work is part of a company’s core competencies, a lack of quality could be disastrous.

Company culture could also be affected by deciding to outsource. Employees may wonder if layoffs are at hand or start to think they are replaceable if it saves the company a buck. Because of this, it’s always important to have direct and honest discussions with employees about why the business is asking for outside help.

The path to outsourcing isn’t a certain one. With it comes lowered costs and a broader talent base, but also a potential for harming a hard-built company culture and the possibility of reduced quality.

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