The Pros and Cons of Outsourcing

Today’s businesses are looking for more ways to be efficient and many have turned to outsourcing in order to improve their operations. Outsourcing is the practice of hiring someone outside of the business to complete a task. This could include individual freelancers all the way up to large companies that specialize in particular tasks. Although outsourcing has its perks and is continuing to grow in the business world, there are some drawbacks to consider. When thinking about outsourcing for your company, be sure to consider all of the pros and cons in order to make the best decision for your business.

Pros of Outsourcing

Save Money

It is almost always cheaper to outsource tasks than it is to hire in-house employees to complete those same tasks. By outsourcing your labor, your company can save money and increase their profits. This is especially true for companies that outsource internationally to countries with lower labor costs. For many, the increased profits that can result are hard for the company to resist. Not only can outsourcing save on labor costs, but since you aren’t hiring additional employees you can also save on other things such as benefits and employee training. 

Reduce Workload and Increase Efficiency

When you outsource certain tasks, you save time for yourself and your employees. In turn, your employees can focus on completing other tasks which can improve your overall efficiency and productivity. This can help streamline your workflow and prevent employee burnout which could otherwise result from having to complete mundane tasks. 

Access Industry Experts

When you outsource non-business specific tasks, you can receive help from professionals in those industries. For example, if you outsource your company’s marketing tasks, you can get help from people who are talented in that specific area rather than relying on the level of expertise your small business can afford to hire.

Increase Focus on Business-Related Functions

When you don’t have to spend your time worrying about non-core business functions, you and your employees can focus all of your attention and efforts on higher-value tasks that are central to your business’ success. In turn, this can help you strengthen your company’s revenue, profits, and growth. 

Cons of Outsourcing

Less Control

When you outsource any function of your business, you are shifting some of your control to the third party vendor. Though you will try to select a vendor that works well with your company, you are still relinquishing some control and are at the mercy of the vendor to get the tasks completed to your satisfaction.

Security Risks

It is so important to choose a third party provider that has a good reputation and sound privacy policies in place. Otherwise, you risk the security and confidentiality of your own business and clients including both personal and professional information. This could put your company’s reputation at risk if your third party vendor doesn’t have proper security protocol in place. 

Delayed Delivery

When you outsource your labor, you run the risk of dealing with delayed operations and late delivery. This could be detrimental to your business and could affect your reputation with customers. Customers don’t want to hear that it wasn’t actually your fault that their product was delayed. Remember that their problems are also your problems. 

Problems with Quality

Despite saving money, outsourcing your labor is only worth it if you are getting quality results. Anything less than what you would accept from your own employees would be a disappointment. Keep in mind that you get what you pay for, so cheaper does not always end up being a better deal.