The Pros And Cons Of Outsourcing
What are the pros and cons of outsourcing? Outsourcing is a business term used to refer to the process in which a third party is used to perform a service instead of within a business. Sometimes, outsourcing can have positive impacts on the company, but it can have some negative impacts as well. In this article, we will outline the pros and the cons outsourcing has to offer.
Pros of Outsourcing
1. Company Does not Have to Hire More Employees.
When a company outsources its services, it can pay them as a contractor. This enables them to bring an employee into the company, which in turn saves them money in many ways right from training to benefits.
2. Access to an Extensive Talent Pool
As you hire an employee, there is a possibility that you are limited to those you interview, which means you may compromise while you train the new employee. Quite a number of companies have discovered that outsourcing offers them access to talent in various parts of the globe. In case you require specialized assistance, it normally sounds prudent to widen your search.
3. Inexpensive Labor Cost
Every firm has its own motives for outsourcing, with quite a number of them aiming at lowering labor costs. You do not want to compromise quality for the price; hence, outsourcing always enables you to get the greater of the two important factors. By exploring a wider talent pool, it is easier to get a suitable talent at a reasonable cost.
Cons of Outsourcing
Regardless of the several pros of outsourcing, you do not want go through with outsourcing until you understand the possible cons.
1. Lack of Control
Although as a company you can give directions concerning what you need to achieve, you will end up giving up some control as you outsource. There are several grounds for this, including the fact that you are usually hiring a contractor rather than an employee. And because the individual is not operating on-site, it can be hard to keep the level of command you need.
2. Problems with Quality
Regardless of all the pros of outsourcing, it is only a positive if you are getting the quality you demand. Anything that goes below the bar will be a setback. This does not mean that you cannot favorably outsource some tasks, but you have to address the quality requirements upfront.
3. Matters on Secrecy as Well as Intellectual Property (IP)
Usually, there are some laws and regulations regarding privacy and IP in countries, like the United States, which are recognized and supported by employees, heads and domestic business owners. However, if you employ people beyond the borders or overseas, you are really making yourself unsafe. What are the possibilities that someone would reproduce your software keys or product idea?
If the country that you are outsourcing from has comparable rules in place, you can take legal action. Otherwise, outsourcing will be a bit challenging. Thus, it is a good idea to think along those lines before outsourcing anything that concerns trade secrets or sensitive data. It’s important to be aware of the pros and cons of outsourcing. Before taking any step, consider all the factors listed above, and compare them to your company’s goals. This will help you in making the appropriate decision that will not jeopardize your company.