Whether you run a small sized business or a larger business, the benefits of outsourcing are undeniable. In this post, we are here to discuss everything there is about Outsourcing. Is it good for a business? Is it bad? What are it’s pro and cons and how exactly can you save money when you outsource work? Keep reading to find out.
To start with,
What is outsourcing?
Outsourcing refers to the procedure of delegation of a business task to an independent professional who is not a part of the organization as a full time employee. To simplify, it is a practice wherein any service, task or deliverable is simply done and delivered by a third party. The third party that is hired to do the job is responsible to deliver the task as per the instructions provided. Any task can be outsourced onshore ie. within the same country or offshore ie. to any other country.
Are there any benefits of Outsourcing? Hell yeah!
Here are 4 reasons why Outsourcing is beneficial for your business
Outsourcing is the simplest way to get work done and save cost while you’re at it. The best part about outsourcing is the fact that you do not have to stress about how the work will be done and you can focus your energy on other tasks that might be higher on the priority list. Businesses from all round the world rely on the benefits of outsourcing to operate effectively and efficiently in the long run with a sustained and balanced usage of resources on the basis of priority.
While outsourcing results in major cost savings for smaller businesses, larger businesses benefit by it not only through cost saving but also through a decreased workload and an increased qualitative advantage of the task assigned. It also gives businesses a chance to decrease the price of their products or services drastically thereby appealing to customers and getting new clients.
Outsourcing is also good if you intend to scale up your business in the near future. If you experience a surge in the demand of your product or services, you can get help by hiring a team through outsourcing. After you are done with the peak season, you can choose to retain or let go of your outsourced team on the basis of your convenience.
The Top 4 Reasons why Outsourcing is beneficial for your business:
– Outsourcing reduces expenses and saves cost
– Outsourcing enhances the overall productivity of any business
– Outsourcing works well in all industries
– Outsourcing works best if you require a certain level of expertise
Does outsourcing have any Cons?
Like anything else, outsourcing too, has its fair share of cons even though it really is very beneficial for business.
The Cons of Outsourcing
– Outsourcing does not give the employer a chance to control the mood, motivation or behavior of employees.
– You will not experience the same level of ease and familiarity with outsourced staff as you would with your full time employees.
– Getting acquainted with outsourcing might take time.
Even though these factors exist, yet we can safely say that they do not have a substantial impact on any business. As long as you are getting quality work at good prices, you are good to go! Also, you must note that these factors vary for different businesses. Outsourcing works best when you have planned everything in advance and defined rules and regulations accordingly.
To start with, it is a good idea to plan a budget which entails the amount that you would be comfortable spending on outsourcing work every now and then or on a quarterly or monthly basis. The best part about doing this is that you do not need to let go of any employee at this point, this is just some extra help that can increase your productivity.
Outsourcing: A major opportunity for developing countries
Developed countries like the US or the UK have been successfully operating on the outsourcing model since quite many years now. Companies in the US prefer having most of their work outsourced as it gives them a huge cost advantage and gets the job done at half the price that they would have to spend in the US. From telecalling to IT tasks, companies existing and operating in developed countries have been experiencing ease and comfort by outsourcing their tasks in countries in India and China.
Research shows that India is all set to emerge as the leading country in the world when it comes to outsourcing. More and more bigger companies throughout the world are now considering India as a prospective destination for outsourcing the majority of their tasks, resulting in cost savings for them and employment generation in India itself. It surely is a win-win situation for both.
Apple, is one brand that outsources most of their design and manufacturing tasks. While Apple majorly operates from the US, it outsources its manufacturing and assembly tasks to China. This is because of the low labour cost that the Chinese subcontinent offers because of their high number of people with inferior living conditions. The low labour cost and ease of sending the goods to the US provides a major cost advantage to Apple.
Experts do agree that continual Outsourcing is the reason behind the rampant unemployment in the US but at the same time companies still choose to do so without any hesitation because of the cost advantage they are getting at the same time. Outsourcing does have its negative as well as positive slides but its benefits surely outrun its negatives. All kinds of companies, whether big or small benefit from outsourcing and experience major cost savings, thereby offering their products and services to customers at reasonable prices.
While outsourcing might be a major threat to the economies of developed countries, for countries like India, Philippines, Indonesia or China, it certainly creates a new pool of opportunities and employment which benefits the economy as well as the companies who are outsourcing the work.
