Posted: 22. July 2019 by: Rupert Tennant

The Upsides of Outsourcing

In a modern and interconnected business world, a company needs to consider outsourcing as one of its options. This process gets a bad rap and is a subject of much political debate, but that’s outside the scope of a particular business owner and their goals.

This isn’t to say that there are no downsides to outsourcing as well, and they should be taken into account as much as the good sides, not only in terms of how your business is perceived but also in the essence of what it gets from the practice.

What is it?

Outsourcing is a hiring practice that consists of hiring workers from abroad to work for your business and to be managed from the company itself, meaning its HQ in the country. This is controversial because the companies aren’t hiring from their own countries but from abroad where the labour is less expensive.

The companies need to think about their bottom line since that’s the only way to remain competitive and if it’s possible for the business to move some of the less demanding work where it’s less expensive to hire so that the company can grow.

Larger labour pool

Labour is the most important asset a business has, and it needs to do everything it can to find and keep the best employees out there. This means that you shouldn’t limit yourself to the labour pool that’s the nearest your actual business and instead goes looking for the best workers where you can.

When you have a larger pool to choose from, there’s a greater chance you’ll find the workers you need, not only in terms of the skills you need but also in terms of fitting in with the corporate culture.

The costs

The main attraction of outsourcing is still the fact that labour will be less costly when you’re hiring from a country where it’s possible to pay less than you would on your own. Since labour is the most important expense a business has, you should try to minimize the cost of it without jeopardizing the quality of the work itself.

This doesn’t mean you should underpay your workers abroad. The difference lays in how your economies work and not in how much you’ll pay them. What you should do is to pay more than the employees could earn from their own country.

Going global

Almost all modern businesses need to think about their work as a global enterprise. That’s because it’s easy to sell abroad and to set up a global infrastructure using modern technology. The labour used for this purpose should be prepared to tackle the international markets as well.

One of the ways of doing so is to hire the workers from abroad since they would already be familiar with the rules, regulations, and overall feel of their owns country’s market. It’s therefore important to hire from those countries you plan to work with and work in.

Dividing up the work

There’s a lot of different work that a company needs to work on. Some of it is essential for expanding and growing the business and other is about working on day to day tasks and keeping the status quo which isn’t a small thing to do.  It might be useful to separate the two.

That can be done, simply by separating the work into two parts. That way, the workers you hire from abroad will work on a day to day tasks, while you can focus on the big picture items and expanding your business into what it can be.

Downsides

It’s also important to mention that there are downsides to this solution as well. First of all, it will outsource some of the jobs done in your country to the countries abroad. This creates social and economic problems for the UK. Simply put, if people no longer have the jobs, the demand for your products might go down as well.

Secondly, there are costs of managing workers from far away, and they might be more complicated than doing it within your own country. There are also problems, with cultural differences that might come up.

Conclusion

There are reasons outsourcing is so popular with businesses even though there is a lot of political backlash to it. Outsourcing means hiring workers from abroad and paying them based on the economic conditions of their own country. This is a way to save on labour, but it’s much more than that.

Besides the savings, there are other benefits to this approach as well. It helps you find the best employees out there, and it allows you to divide the work so that your home team is focused on only a few essential tasks. There are downsides as well, and you should be aware of them too, before starting it in the first place.