The Pros and Cons of Outsourcing

Your business can’t be a one-man act forever. As your business grows, so should your human capital.
 
When you build your team, you can opt to hire someone and run the operation in-house or outsource it to another company. Outsourcing is a business practice where portions of work are transferred to outside suppliers instead of doing it in-house. Businesses typically outsource functions that are not at their core or when specialized skills are needed to complete tasks.
 
As a business owner, you may reach a point where you start to consider outsourcing some of your workforce. This could be because you’re thinking of reducing costs or any number of reasons, but either way, outsourcing is something you need to decide on carefully.
 
Here are some pros and cons you may want to consider before deciding to outsource:

Pros of Outsourcing

  1. Reduced Cost
    This is the main reason why companies choose to outsource. Outsourcing is perceived to help save on recruitment and operational costs. Because you can add or reduce the number of people to staff, it’s also considered more flexible.
     
  2. Skilled Services
    Outsourcing certain parts of your business means you have staff members who specialize in that field who are more likely to meet expectations and milestones better. Also, your in-house personnel can focus on developing the organization’s core services instead of trying to do everything.
     
  3. No Hiring/Firing Drama
    It’s easier to replace someone if the work relationship isn’t working, sans the headaches associated with hiring and terminating an employee.
     
  4. Contractual Obligation
    Because the liability of the service provider is higher than that of an in-house staffer, working with the former can be considered safer.

Cons of Outsourcing

  1. Security Risks 
    Once information goes off-site, there’s the risk that sensitive information can be misused.
     
  2. Varying Professional Standards
    When you outsource your workforce, they are likely to have different professional standards because you may not be their only customer and they also need to prioritize.
     
  3. Loss of Control 
    You may find yourself in situations where you don’t have control of your staff. For example, there may be a delay in deliverables, which will inevitably cause a delay in the whole project. This can be because of miscommunication, communication lag, and so forth. It’s a downside to outsourcing that’s pretty difficult to avoid.
     
  4. Lack of Focus 
    When you outsource your team, it’s hard to ensure that they are giving your project adequate attention. Because your team is working part-time, you can only hope that your project is given priority over their other projects or clients.

Let One Asia Center help you build the dream team that will help you grow your business. Our Business Support Services include Recruitment and Human Resource Management, allowing you to set up shop quickly and easily. Learn more about our services here.