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Productivity / Outsourcing

The pros and cons of outsourcing

Outsourcing means that your business processes are contracted to a third party who is not on the premises. Let’s find out the pros and cons.

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Pros

Save time 

Whether you’re in startup mode or established, you no doubt have a long list of jobs to complete. Outsourcing some of these tasks allows you to shift focus to areas that are more important or a better use of your time. For example, if you outsource payroll, admin or IT, you have more time to focus on business strategy, sales or business marketing. It also means that you don’t have to spend time trying to become an expert in new areas. 

Reduced costs 

Office costs can be greatly reduced when you don’t need to make room for onsite staff. This releases money that can be invested in other parts of your business. 

Also, if you outsource tasks to remote overseas staff, you’ll generally pay a lower hourly rate. 

"While outsourcing might be cost-effective, it can involve hidden costs such as delays in work completion, high turnover costs and productivity fluctuations."

Access a large pool of talent

Sometimes it can be hard to find qualified employees for particular jobs or in certain locations. By choosing to outsource, you can access a larger pool of talent. 

Faster turnaround

Rather than hiring, training and supporting in-house staff to get a project up and running, you can outsource to people who may have the time and resources to start a new or involved project straight away.

Want more articles like this? Check out the outsourcing section.

The Cons 

Hidden costs 

While outsourcing might be cost-effective, it can involve hidden costs such as delays in work completion, high turnover costs and productivity fluctuations. 

Communication barriers 

Communication barriers can take place whether you outsource to local or overseas remote staff, leading to poor performance. Language difficulties and contextual unfamiliarity can also threaten the quality of customer service. 

Confidentiality risks 

Confidential information can be exposed when tasks such as invoicing, payroll, admin and IT are outsourced. 

Lack of focus 

Onsite staff work exclusively on your business, whereas remote staff work on different projects from different clients, which could lead to a lack of focus at times. 

Many factors need to be considered when deciding whether to outsource tasks or hire an employee. Hopefully this article has helped you to make an informed decision.  

What are your thoughts on the pros and cons of outsourcing?

Andrew Morris

is the Director of Western Australia and Queensland at Robert Half. He uses his knowledge of the Australian and Asian recruitment markets to offer clients, candidates and the media a regional perspective on recruitment trends.

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