10 Outsourcing Pros and Cons for Your Business

January 6th, 2014

technology experts gathered around a table

The word outsourcing is often met with fear because it’s associated with cutting staff and a reduced quality of work, but it can save your business a lot of money and make sure you get the expertise you need. Of course there are two sides to any story, so here are ten of the major pros and cons of outsourcing so you can be well informed before making any big business decisions.

Pro 1: Save time. Outsourcing can be used to palm off some of the more time-consuming but simple tasks such as data entry, research or basic programming. This means you have more time to focus on the complicated aspects of the business and the tasks that require highly delineated skills.

Con 1: Time delays. In contrast to the above, some business owners think that an outsourced job can slow work down. Mark Hall, the co-founder of the social job search tool Jobzey, believes that projects will usually take four times longer than what you expect when using outsourced staff. Reasons include communication problems and inaccuracies.

Pro 2: Use skills you don’t have. Outsourcing can be utilised to complete tasks that you or your staff do not have proficient skills in. Examples include writing or tech troubleshooting. And don’t forget that specialised areas like legal services, accounting and insurance are often outsourced by businesses to get the best possible results.

Con 2: Different country, different laws. Overseas staff may not be governed by the same intellectual property and privacy laws as you. It’s a small point that can become a big headache for businesses.

Pro 3: Save money. Saving on costs is a huge motivating factor for businesses. Offshore outsourcing is often cheaper than domestic work and contracting employees can work out financially better than if you had part-time or full-time staff.

Con 3: Different professional standards. It’s safe to say that an overseas worker who doesn’t have much knowledge of you or your business will not have the same loyalty as someone working alongside you every day. This can lead to outsourced workers not prioritising your assignments or putting in the extra effort that is sometimes required.

Pro 4: Flexible time. If your outsourced employees work in a different time zone you could essentially have your business running 24/7 as they’ll be working while you sleep. If you use overseas staff they may have different holidays, so someone could be working for your business even on Christmas Day, Easter or national holidays.

Con 4: Hard to keep track. When a team is overseas it is hard to measure their productivity levels and attention to detail. You can only hope that they are giving your company’s projects their full attention. To help make sure you are getting your money’s worth, Hall recommended setting daily and weekly milestones so that projects can get out on time.

Pro 5: Distant relationships. Having employees on a contractual basis that you don’t see everyday makes it easier to fire people. It sounds simple but this can save you a lot of emotional stress in the long run. Having more distant employees can also save you time through fewer distractions.

Con 5: Distant relationships. While fewer people in the office has its pros, ultimately, a close team is a good team. Having people that you love to work with and see everyday can make running a business so much more fulfilling and you can make friends for life.

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