It is commonly said that the strength of a team is the individuals, while the strength of the individual in the team. And as Loisa may Alcott puts it, it takes two flints to make the fire.
But what about when the entire team can’t offer all the needed services? What about when you need short-termed services?
Likely, you thought of hiring a new team member, but will you keep on hiring new individuals? If you were, to be frank, I guess not. What am I diving to?
This is it; outsourcing is inevitable as your business grows. But as fate has it, it still got its disadvantages.
What are the negative effects of outsourcing? But more importantly, can outsourcing of services work out for your benefit? That and much more is what we will be getting the in-depth details of.
Caution; this article puts things as they are, be ready to handle the bitter-sweet truth.
What are the Benefits of Outsourcing?
Frankly, there are countless benefits of outsourcing services. Consequently, it has been a buzz about it in the business world.
But before that, what does outsourcing mean? It refers to the act of a company entrusting a process or service to be done by a third-party service provider.
Generally, outsourcing services focus on cutting off the extra cost while improving the quality of the services. Who wouldn’t like that amid the stiff competition? No further delays; let’s have the real deal rolling.
1. Cost Advantages
The sole purpose of any business is to make as much profit as possible and keep the minima losses. That can only be achieved by reducing expenditures and getting accountable for every coin that is sourced out of business.
Either way that is not a free win to reduce the quality of the services. Actually, if you need the business to keep on growing, then improving the service quality is not optional.
How can outsourcing services be effective in reducing expenditures?
As earlier indicated, outsourcing is letting a third-party service provider. As a result, you reduce the cost of hiring a new employee as well as reduces extra expenditure’s on the equipment.
The bottom line?
Outsourcing services locally or globally cut off the expense of hiring a new employee and setting up their space while enjoying a fresh taste of quality services.
2. Improved Focus on the Key Goal
Unbent focus is paramount for any success. And what distinguishes the winners from the losses is their level of consistency and diligence to the primary goal.
No one gets to the business world with a losing mentality. However, the mentality is not all needed but doing the right thing with undivided attention. As Mother Nature has it, energy in the right direction bears fruits. In fact, that is what brought the idea of specialization.
But what will happen when the accountant is given the duty to build a computer program actively? You can wholeheartedly agree that the attention from the area of specialization will be reduced to provide the needed program.
What’s the point?
Outsourcing services let the other employees keep their eyes on the end goal as the third party plays the role of providing the new service needed.
Apart from that?
A healthy team delivers healthy results. Consequently, it will be outrageous to overwork the team just because you need something extra delivered. Am I supporting underworking? Absolutely not.
3. Fast and Timely Results
Achievements in business are beyond the glamour of making it as much as it is essential. Results and services not only need to be delivered in the highest quality but also within the time.
That basically helps to maintain the clients’ trustworthiness and, vitally, take advantage of the peak seasons.
That is the core reason why most big companies embrace the act of outsourcing services is getting faster and timely results.
When working with a team with tight deadlines or in the presence of a short-living peak season, don’t fear to get out of the shell and outsource the services as long as it is within the business goal.
4. More Experts at Work
This is the reason that made me embrace the act of outsourcing services when growing my business.
Just picture this, you need this high-quality system that will cost you a bank, but there is this angel-sent person who is ready to offer their system rather than purchasing your system?
Apart from that, rather than getting a whole set of a new team to the payroll to develop the system, you can just get a short contract from a third party of a specialized team to get things done? A jackpot, right?
What’s the cool thing here?
Fact that not every team is perfect in everything, outsourcing services will get you a specialized expert who will deliver the expected results.
4 Ways Outsourcing Damages Industry
As much as outsourcing has brought a radical change in the delivery of services, we can’t afford to close our eyes to its adverse effects in the industry. The four outrageous results of outsourcing services are;
1. Service Instability
Imagine that you will keep on hiring a third-party service provider regularly, worse a different agency every time. Can you think of the possible effects?
First, there is likely to be inconsistency in the delivery of services because of the clients’ different personalities.
Every time that you need the service, you will keep on outsourcing. Honestly, in the long run, that may run out to be expensive.
2. Loss of control and focus
Usually, most of the outsourcing agencies are freelancers, and likely to be expensive or even impossible to meet them in person
First, you would be there in person to control and monitor the delivery and development of the services. Hence, bringing the possibility of lower output.
Still, due to the nature of most freelancers of dealing with multiple and diverse clients, there is a possibility that you will receive demeaned attention.
Can you beat that?
Yes! It is possible to navigate the effects of getting lesser attention and lower results from the outsourcing agencies. This it; check the work ethics of the clients and as well get some physical testimonials.
3. The shift of time frames
With the fact that we can’t do anything on the earth’s rotation, you can be sure of the time difference, especially when outsourcing services globally.
Thus, if there was a need for a meeting, it may not be easy to schedule it within the active working hours.
And the most bitter part?
4. Confidentiality risk
Any time you let in a new employee, you put the confidentiality of the business at stake. Nothing changes when outsourcing services. Actually, I guess the risk increases. Why?
Likely, you haven’t met the agency, you are not aware of the client you are dealing with, and probably the client might have a hidden agenda.
To take it further?
There are some services to be provided; you will have to disclose critical information about the company. Will the client honor the confidentiality oath? That is highly debatable.
How Can Outsourcing be Beneficial to Developing Countries?
Tracing back to the 1880s, when the New England Company moved its textile milling to Carolina, the footsteps of outsourcing services and jobs can be found. And due to the advancement s in infrastructure and technology, the world has been seen as one village.
And you could guess it the third world countries do not lag.
How is outsourcing evident and of benefit to the third world countries?
To begin with is job creation. Third-world countries have higher unemployment, and honestly, the outsourcing of services by the developed countries has been a great rescue.
How is that?
That happens through the freelancing sites or the idea of remote working. Taking the instance of India, which is the home of tech enthusiasts, companies based in the US have been outsourcing India’s services.
Outsourcing of services from third-world countries helps to decrease the unemployment rates. Hence, increasing their net incomes, which leads to economic growth.
More critically, outsourcing services benefit the developing countries due to the shared knowledge and a whole new set of environments.
This is the silver lining; the outsourcing client from third-world countries will get the privilege to learn new ways of working and better get to learn their management and winning secrets.
And if the clients are brilliant enough, they can deploy the same strategy in their economy, which would fail to see economic growth.
Outsourcing services overseas and its effects on the US economy
The US is ranked as a developed country. Hence, in most cases, it hires individuals to work remotely. However, as much as it has done them good in getting things done, opinions have it that it hasn’t been useful to their economy. How?
The main adverse effect of outsourcing services in the US economy is that it leads to unemployment. Allow me to explain.
Over 14.3 million employers are outsourced from majorly China and India due to their advancements in technology. The unemployment rate is at approximately a population of 5.3 million. Do you get what that means? If the outsourced jobs are hired locally, the unemployment would be almost at zero-level
However, President Trump has been in reducing the outsourcing of services. This has led him to a decision to pressure China to increase its currency value and reduce the subsidies.
More critically was his decision to negotiate with NAFTA, which would bring the end to the maquiladora program.
Let’s now check on the brighter side.
Outsourcing services overseas has had a positive effect on the US effects on the economy as well. How?
Remarkably, it is due to the cut of labor expenses. Most of the overseas countries’ wages are lower compared to hiring an employee in the US. Thus, leading to increased profits.
The most advantaged sector in computing. How? That is, the US based-companies can get well-developed software engineers to have their programs and systems developed.
We’ve done our part; the ball is now in your court. Decide if you are willing to embrace this new change in outsourcing services. The good thing is that you are aware of even their demerits. Hence you can brainstorm and have calculated risks.