Outsourcing Companies: The Pros and Cons


Outsourcing is one of the most popular options for modern companies. If you are looking for employees who could fulfill the assigned tasks, you are not limited to one city or country. This is a global trend that has no boundaries. But what is behind the progressiveness and new opportunities for companies? Here are the main advantages and disadvantages that are critically important for any executive to know before choosing outsourcing as a key strategy for a company.

Advantages Of Outsourcing

You Don't Have To Hire More Employees

Outsourcing is interesting because your company can enter into short-term contracts with some people if you need specific services. The fact is that it is much more profitable than hiring a new employee and spending money on benefits, insurance, and social guarantees.

This advantage can be compared to searching for free academic papers on history. Sometimes it's better to spend 10-15 minutes and pick a sample than to spend a few days doing it yourself or asking someone. Outsourcing solves many of the problems associated with a shortage of professionals, and you should know this.

Access to a Larger Talent Pool

What if your company's office is located in a small town and you don't have access to a large number of professionals? Does this mean that you need to make compromises and choose those people who know how to perform only basic tasks? No. Outsourcing is an opportunity to hire a professional who lives in another country or another part of the world. All you need is a little time to select the most talented candidate.

Lower Labor Cost

This is partly an opportunity to maintain a balance between the quality of services and their cost. Many people are ready to complete tasks that are important for you at an affordable price. Since your city or state does not limit you, this is an additional benefit worth taking advantage of now. Lower labor cost is important for any startup that cannot hire local professionals. This capability can be compared to business school essay examples. You can choose any option regardless of your location to achieve your goal.

Cons of Outsourcing

Lack of Control

The specificity of the work of many companies is based on a large team and the deep involvement of each employee in the overall process. When you conclude a contract with someone outside the country, you cannot be 100% sure that all your tasks are fully understood. Some disagreements and lack of clear instructions can be the reason for reduced efficiency. That is why outsourcing is a good solution for companies that are aware of all the risks and are ready to develop an exact algorithm of actions so that the lack of control does not affect the results and bottom line.

Communication Issues

Of course, the digital age has greatly simplified the work of international companies and those business startups for which outsourcing is the only acceptable solution. However, several nuances can negatively affect the productivity of your business.
  1. Different time zones.
  2. Problems with the Internet or cellular connection.
  3. Force majeure.
  4. Weather disasters.
Imagine that some of your outsourced teams live in Japan and need to temporarily leave their offices to escape the tsunami. This is a rare option, but what about Internet problems due to heatwaves and wildfires destroying broadcast towers? Sometimes even a language barrier can cause some delays and performance degradation. This is why outsourcing is a trade-off, and you should understand that.

Problems With Quality

This problem can be partly solved if you set the task for the new people and indicate all the important nuances to you. The only caveat is that you cannot control everyone around the clock. What if the professional you hired doesn't fully understand the process or the result? Then quality problems can be a real enough headache for every boss.

One of the most effective solutions in such a situation is detailed task descriptions and video conferences. Only regular discussion and agreement of all aspects of the task can lead to a positive result. It’s simple. However, if you are confident in the people you are delegating tasks to, such a problem is unlikely.

Impact on Company Culture

Corporate culture is a very delicate balance between the morality and motivation of your employees. For example, let's say you have professionals who have proven their exceptional skills in performing certain tasks. What if you delegate some of their responsibilities to other people who may live in the neighboring country? This can negatively affect morale and motivation.

What if your employees think they are being replaced? In addition, a team of professionals will always react cautiously to the boss's decisions, delegating tasks to people from other states and even continents. Finally, your team may think that you are striving for a total cost reduction.

Final Words

Do not think that outsourcing is an endless evil or the Holy Grail for any business. Evaluate all the advantages and disadvantages and try to reduce the negative effect of pitfalls. Consider all the possible consequences of delegating tasks. Then you can reach a compromise and not worry about outsourcing drawbacks.

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