How to Identify if Outsourcing is Right for Your Company?


Understand the pros and cons of outsourcing

Inevitably most companies will look into outsourcing for services including recruitment, stocktaking, legal services and web design. It is important to understand what the pros and cons of outsourcing are, these can be dependent on the specific service a company is outsourcing and the size of the company.

Outsourcing is normally used when a company requires a specific skillset or they do not want to use the existing staff as they are required to concentrate on their core job role. There are pros and cons to both remaining in-house or outsourcing. I have listed some of them below.

The pros of outsourcing

• Expertise – normally, work outsourced to vendors are to those that specialise in that specific field. This can increase the speed of the work completed versus existing employees that may have a limited skillset. Using a specialist outsourcing company is more likely to give you accurate results.
• Core – employees and the business can concentrate on core business requirements rather than supporting processes.
• Reduced costs – by outsourcing to another company the costs related to the services they offer could be less than a company employing someone specifically for that role. This includes operational and recruitment costs. It also means existing staff do not need to be trained in a new role – which can mean overtime and reduced time in their actual job role.
• Staff retention – employees typically prefer to do the job role they were employed for rather than taking on additional tasks that they are not comfortable with or happy doing.

The cons of outsourcing

• Control – a company can feel they do not have total control over a process if it is outsourced.
• Data – concerns can sometimes be raised about confidential data if a company outsources HR, payroll or recruitment services.
• Hidden costs – outsourcing most of the time is cost effective but a company should always check contracts for any hidden costs and clauses.
• Change – some companies do not see the benefit of changing the way they currently do things so will not even consider outsourcing.

A company should always consider all the pros and cons of outsourcing before approaching a service provider. They should always look at more than one potential vendor to compare services, their existing customers and costs to enable the company to make an informed decision.