No matter if you provide services or build products, there are two ways to get things done — by hiring an in-house team and by outsourcing job duties to a third party. The in-house hiring concept has been in existence for decades, but outsourcing is the next big thing and many large companies and startups have started relying on it for most of their tasks.
What Is Outsourcing?
Outsourcing, in simple words, is to hire a third party and make it work on your behalf to perform a certain service or build a product. Although someone else does your job, they never get to communicate with your clients. So, in a way, you quote a fixed amount to deliver a service or product to your clients. Once they give you the project and make the payment, you hire someone else at a comparatively lower payment to get those tasks finished.
You can outsource customer experience services, digital services, healthcare solutions, admin support-related tasks, and other operational duties that don’t require your active presence for a successful delivery.
Pros & Cons of Outsourcing:
Outsourcing seems to be a fascinating concept that almost every small and large-cap organization wants to give a shot. If you also contemplate making the same move, these pros and cons of outsourcing will help you arrive at a conclusion quickly.
Pros of Outsourcing:
- The first benefit of outsourcing is that it can increase your profits significantly. Since you can hire a third-party at a comparatively cheaper price than what you are getting paid from your clients and get a lot many things done in a short period, the profit margins tend to touch all new heights in no time.
- It can increase economic efficiency and help provide jobs to developing nations.
- Outsourcing can strengthen global relations among nations.
Cons of Outsourcing:
- Outsourcing affects local job creation, i.e. job loss in your own country.
- Sometimes, transparency can be an issue while outsourcing jobs to people or teams that you hired recently.
- If the tasks outsourced haven’t been performed well by the third party, your reputation in front of your clients may hamper.
Keep a note of these points and decide accordingly if you want to outsource or not.