In this era of cutthroat competition for sales and revenues, companies have to consistently come up with new and innovative ways to stay ahead of the pack. It is this nature of fierce competition that has given rise to unprecedented levels of accomplishments in the corporate sector. Among the most notable and most revolutionary ideas is outsourcing. For those who are unaware of what outsourcing is, in simple terms “it is the allocation of specific business processes to an external specialist entity”. This means that companies get to offload some of the stress of corporate functions like HR, marketing, supply chain, IT and Finance etc while simultaneously directing those freed resources towards strengthening another area.

Many corporations prefer leaving their marketing to external marketing firms who are experts in their fields. Similarly, there are different corporations that allot their IT and data handling responsibilities to external IT firms. However, for all the benefits they can bring there are also certain downsides. It is crucial that corporations understand both sides of the coin in this regard.

Advantages

• No more hiring:

Once you’ve decided to outsource a specific part of your company’s operations, you can be rest assured that there’s no more need to hire more employees. Not only will this result in money being saved but there’s considerable amount of time that you will save that would otherwise have been spent on training any new employee.

• Access to talent pool:

When you hire a new employee, talented as much as they might be, there will always be a learning curve and the productivity will still not be comparable to the scale of having access to international pool of talents who are market experts in their respective fields.

• Labor costs:

Most of the corporations that offer outsourcing services will charge you a lower sum that you would otherwise be paying to a division performing similar tasks within your organization. Using outsourcing, a company has a greater chance of enlisting extraordinary talent at a cheaper price.

Disadvantages

• Lesser control:

Thanks to technology, it has become incomprehensibly easier to be in frequent contact. However, though you can provide a specific direction regarding how you want specific things done you are undoubtedly giving up control over those tasks. You should keep it in mind that companies hire contractors through outsourcing, not employees. As these contractors are not on-site or even the same time zone for that matter, it is difficult to keep a constant eye over quality.

• Communication:

As mentioned above, issues like being in different time zones means that there will always be a gap in their message being delivered to you and your response to them. Phones, emails, instant messaging are all phenomenal tools but none can compare to an actual one-on-one meeting between a boss and his employee.

• Company culture:

This is by far the biggest concern that outsourcing will create among your employees. A positive work culture translates into greater productivity. If employees feel that they’re being replaced or downsized then that can have catastrophic consequences for office morale. Furthermore, high performing employees may feel that their work is not being appreciated enough.

All things considered, if your company is looking to outsource some of its functions and wants a thorough consultation as well as guidance on how to best makes use of it according to your company’s needs then head over to JS Benefits Group and get in contact with us.