By Dancun Kingori
Outsourcing is such a popular concept in the business world, where so many companies have for a long while enjoyed the benefits thereof. The idea generally revolves around seeking external third-party involvement in handling some company operations over a specified period.
Now, depending on the type of business you are, the size of the company, the longevity of the outsourcing services, among other factors, outsourcing can have both negative and positive impacts on your business, which raises the question, is outsourcing a good idea for businesses?
Benefits of Outsourcing
Lower Labor Costs
Perhaps the most obvious advantage, outsourcing is very lenient on the cost of labor. There are many professionals all over different locations in the world, who would be willing to handle a function of the overall operations of your business for a lower cost than others would.
Further, outsourcing is not supposed to be permanent, which means you can always terminate the use of outsourced services, which is not quite the case for hiring permanent employees to handle the same tasks throughout their existence in the company.
No Need to Hire More Employees
Once the servicer is on board, the department with which you have assigned them tasks do not require additional people to handle, and therefore, it takes away the need for hiring employees in those positions.
Increased Speed of Performance
When contracting people to handle assigned tasks in your company, the very initial steps are about feeding them with your needs, expectations, and aims for that particular project. The idea is to convey your goals, with a time limit to it, which makes things get done speedily, and in that case with better quality than would the case of hiring employees that require time to accustom to the organizational culture, and sustained efforts to motivate them to keep them highly productive.
Expert Problem Solving
A lot of problems tend to creep in in any business set up, and often, employees do not handle them with the required professionalism. With outsourcing, the idea is to contract experienced people who are versed in the facet you assign them to, and this way, you secure professional opinions to critical problem-solving in that area. For example, a lawyer would better handle a legal controversy than a mere HR employee.
Cons of Outsourcing
You know how you can assign your employee numerous tasks, even those of different fields of study? Well, with outsourcing, you are limited in the functions you can offer them. For example, where a communication’s desk employee would handle reception, PR, HR and even some aspects of bookkeeping, a contractor can only handle one facet, say, HR. If you need multiple issues taken care of, you will need to get more contractors.
Losing Control Over the Process
Once you have consulted a contractor, you leave them to perform the tasks, and according to the agreement, minimal or no supervision is needed. In this case, you can quickly lose control over the operations of the contracted employees, and the tasks ongoing in your company, which can result in low-quality delivery of work.
Further, the contractors are not there to completely master the goals and objectives of your company, and leading on without proper understanding can give you substandard results. You may not be in a position to control things, and implementing specific changes in your business can be significantly harder than usual.
Inclusive Long-Term Expenses
Much as lower labor cost is an advantage of outsourcing, the total long-term inclusive expenditures can dig very deep into your budget. Ideally, outsourcing is like trying to patch a hole on the wall and still noticing the cracks on the surface. What this analogy means is that you cannot outsource forever. Some functions in business are irreplaceable and require a permanent solution, and if you continue outsourcing, then you may incur very high costs in the long run.
Remember outsourcing is distinctively different from hiring staff members in the sense of adapting to the organizational culture. If you have a communication system in place, it may not work with the outsourcing personnel.
Further, you may have particular limitations in communication due to issues like time zone disparities, preferences and culture, internet connectivity, among other reasons.
Impact on Organizational Culture
Other than in the ways earlier discussed in this text, outsourcing has enormous effects on the culture of any company. At the least of things, the existing employees may begin to get worked up because of the fear of being replaced. It also breeds room for confusion, and in the worst case scenario, contempt among your staff who may not quite understand the need for outsourcing. Issues in communication, productivity and motivation may as well be negatively impacted.
Overall, there is no shame in outsourcing to help handle a few complex situations in your company, where need be. However, you must tread carefully lest you lose more than you are seeking to gain.