Outsourcing is one of the most controversial business practices that is in place today. This is because outsourcing is often seen as the practice of a business taking jobs away from one country and creating jobs in another country that have cheaper standards of living. Outsourcing, however, can simply be taking a job that a sole proprietor does on their own and hiring an independent contractor to do the work instead. There are some pros and cons to think about if you are considering an outsourcing plan of action, so here are few things to consider in more detail.
The Pros of Outsourcing
1. It can save a business money on their labor costs.
Labor costs tend to be one of the largest expenses that a business has every year. By outsourcing jobs that can be done elsewhere at a lower cost, there doesn’t need to be a compromise on the level of quality that is produced while cost savings measures can be used to improve the budget for outgoing salaries.
2. More experience can be obtained.
Sometimes outsourcing is less about the money being spent and more about the experience that can be obtained. If a job comes in for a business and no one has the skills to get the job done, outsourcing gives that business the option of getting a specific job completed without having to hire a new employee to do it.
3. It can improve the speed of delivery.
When there is too much work for a business to handle, outsourcing allows that business to adapt to their changing delivery schedule without creating something that is permanent. This will allow them to meet deadlines better without really affecting their current income levels.
The Cons of Outsourcing
1. It may result in less overall control.
Businesses that outsource jobs are essentially losing direct control over the processes that are creating the end products. They can still supervise employees and may even have representatives at the agency that has received the outsourced work, but in the end it’s the other company that controls who gets hired and monitors the quality standards.
2. It may increase overall costs.
Although outsourcing is usually done to save money or obtain a higher level of expertise, the end results can sometimes mean more money has to be spent. If an inferior product is delivered or there are problems with the production line, a business may find that it is more expensive to outsource than keep things in-house.
3. Outsourcing has bad PR.
Many people don’t like the idea of outsourcing because it seems like it is costing them the chance of getting a good job. Businesses that openly outsource their work may struggle to expand their customer base in certain target demographics just because of how they are employing people.
Outsourcing is generally a good business practice, but it needs to be done correctly in order for it to be successful. By evaluating the pros and cons of this practice, each business can decide if it is time to move in a different direction.