What are the Pros and Cons Of Outsourcing?
The outsourcing business has been in growth for the past few years, hiring an outsource company to carry out one or two of your business’s task, from product development, or sales, to marketing, there can be a variety of benefits of taking this approach.
Hiring and Outsourcing can have its Pros and Cons, but what are the pros and the cons of that, and how can you make the best choice for your business, in this article you will know what are the advantages and disadvantages, and how can you benefit from having outsourcing to your business, keep on reading to know more.
What does Outsourcing mean?
Outsourcing is the process of shifting a company’s businesses to an external agency to improve service quality and driving innovation as well as increasing the business benefits, and decreasing labor costs.
When the outsourcing company is located abroad or out of the country it is usually called offshoring, also known as offshore outsourcing.
How outsourcing is affecting your business?
Outsourcing has a great effect on the company’s business, as it enables the company to generate better revenue recognition and to provide them an added competitive differentiator.
Moreover, Outsourcing has a great effect on the quality of the product or the service you are offering, it has both a negative and positive effect on the products, either by lowing or enchaining its quality.
While there could either be an increase or decrease in the quality and the service you are offering while outsourcing, it could also result in improving or debase customer service. Outsourcing can result in making the management easier as well as improve the productivity, bottom line outing is affecting your whole business, That is the reason why you should make sure that you are choosing the best outsourcing.
In the next few lines, we will discuss the pros and cons of outsourcing.
Pros Of Outsourcing
Knowing the pros of outsourcing will help you decide whether you are going to hire one or not, and here is some reason that might help you choose an outsourcing company:
1. Cut Down The Number Of Your Employees, No New Employees Needed
One of the top benefits of hiring an outsource company is that you don’t need to hire more employees and bring them to your company.
You can just pay your outsource for a contract for some time, which will save you both time and money.
2. Outsourcing = Bigger Talent Access
When you take the lead of hiring your employees, you are restricted by your location, you only have access to the sources you locally have.
And being restricted can be not very beneficial for your business as it will make you compromise with your employees.
On the other hand, hiring an outsourcing company will help you have access to a greater market, which will help you choose the best talents in the market now.
3. Lower Labor Cost
Every business will have a different reason why they are hiring an outsource company but for most of the companies the reason behind hiring an outsourced company.
4- Outsourcing Will Increase Your Company’s Profit
Generally, COmpanies hire and outsource their business so they can promote their goods abroad and globally and thus increase their sales and increase their profits. The increased profits that can result are hard for companies to resist. Companies may also outsource to save themselves the expense of training and hiring all in-house employees or to scale their business.
5- Outsourcing can In Re-distributing jobs all over the world.
Outsourcing to a foreign country may result in decreasing the job opportunities in your country, but it definitely will help to create more jobs in other countries especially developing one.
By hiring an outsource you are helping in creating more job offers for jobless people in developing countries.
6- Outsourcing can strengthen international ties.
According to some experts, the countries that have business ties are less likely to go into war. Hiring or having an outsource company outside your local area can help you strengthen your ties with many countries.
Cons Of Outsourcing
Talking about the disadvantages of outsourcing doesn’t mean that hiring an outsource will always have a negative impact on your company’s culture, but it means that you need to be ready for any sudden changes and protect your business from any negative impacts.
Taking into consideration the pros and cons of outsourcing will help you make the best decision for your business. Outsourcing can and will affect your company’s culture, despite the benefits of outsourcing, you need to take into consideration the negative effect of it.
1. You are not Fully In Control
Even though you can give direction about what you exactly need and how you needed to accomplish, you are still not in full control of everything.
It becomes harder to maintain the level of control you want whale hiring outsourcing.
2. Lack of Communication
Communication issues are one of the biggest drawbacks that you might face while outsourcing.
Lack of communication can be because of different reasons like different time zone, the preferred method of communication, do they have a stable internet connection?
3. Quality Issues
In spite of that outsourcing can be the reason of your quality improvement, it can also be the reason for your quality issue.
This isn’t to say you can’t successfully outsource particular tasks, but you need to discuss the expected quality upfront.
Bottom Line, outsourcing is a complicated process, you can see a different zone of this process according to your business level.
But keeping in in the pros and the cons of outsourcing and choosing what is beneficial for your business will be the best decision.
Keep in mind the previous advantages and disadvantages of hiring outsourcing companies and others that you may hear or read somewhere else. Asking business fellows about their experience with outsourcing can help you make the best decision.
