Outsourcing In Your Business

  Have you had to complete a task and decided to delegate it to someone else? That’s basically how outsourcing works.

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Workforce Group defines outsourcing as a process where a company passes over the responsibility of planning an activity or project that is or could be done internally to another company (Service Provider). Outsourcing is a practice many companies deploy to get skilled people to get the job done without getting involved in the process. It is best suitable for businesses to help reduce the overhead cost of having so many employees to do so many jobs. With over 300,000 jobs outsourced a year and 59% of businesses saying that outsourcing has helped reduce their expenses, we can say that there is finally a solution that supports increased job creation for the public and cost-effectiveness for businesses.

Advantages Of Outsourcing

• It Saves Time

For the most part, most businesses have admitted to the fact that outsourcing helps them save time by providing them with the opportunity to focus on what they do best (their core strengths) rather than waste time trying to hire new employees or get all the job done.

• It Saves Cost

A study has shown that outsourcing reduces costs by 20-30%. If you need to carry out bookkeeping in your company and have the opportunity to choose between hiring an accountant which will cost you a monthly salary or outsourcing the task to a financial firm that does it full-time and you get to pay on a contract basis, which would you choose? I guess you will choose the latter. Well, I would too!

• Increased Competency and Efficiency

When outsourcing is employed, time and cost are saved which makes the business laser-focused on satisfying customers and becoming an industry expert, giving it more credibility.

Disadvantages Of Outsourcing

Everything that has a good side also has its flaws. For outsourcing, they are:

• Cost

Yes, Cost could be an advantage as well as a disadvantage too. Running a small business with little to no profit in its early stages might have you doing it all on your own except you have adequate funding. You might want to screen out what you could DIY (Do It Yourself) and what you’d need help with.

• Communication Barrier

Effective communication is essential for achieving success. A slight disruption in the chain of communication can cost the business a lot, and with parties having different cultures/lifestyles, the probability of information being misinterpreted is high.

• Security Threats

Outsourcing opens the business to threats as sensitive information required to carry out tasks is being open and makes the business vulnerable to attacks except there is an existence of a Non-Disclosure Agreement (NDA).

Steps To Effective Outsourcing

• Identify the task to be outsourced – Nothing could get worse than when you can’t identify what you need outsourced.
• Analyze the situation to determine if outsourcing is the best option – Is it something you could DIY? Will the cost affect your business in any way?
• Prepare all necessary information required to ease the job – this cannot be emphasized enough. Saves you stress all the time.
• Make your research and leverage other people’s recommendations in selecting a service provider.
• Reach legal agreements – a simple contract should do.
• Negotiate cost – it’s best you work with who/what suits the level of your business.

Tools For Outsourcing (Freelance Marketplace/Platforms For Outsourcing)

Upwork Upwork connects businesses with freelancers, independent talent, and agencies around the globe where companies and freelancers work together in new ways. Fiverr Fiverr’s mission is to change how the world works together. Fiverr connects businesses with freelancers offering digital services in 300+ categories. Featured Image Source: Investopedia

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