The international outsourcing market was worth $232 billion in 2020, and is projected to almost double by 2028 according to one study. Indeed, outsourcing has become the preferred method by businesses to augment their limited workforce and grow their business. Many companies find this setup advantageous, though with some caveats to look out for.
The advantages of outsourcing
Outsourcing is becoming the new normal for many businesses struggling to balance competitiveness and operational costs. Here are some reasons why:
- Outsourcing saves businesses money. 70% of business executives say they outsource to cut costs. This is because hiring in-house talent necessitates paying for their benefits and paid time-off on top of their salary, and this does not come cheap. This is not the case when you outsource, as you get access to individual experts or entire teams at affordable rates.
- It saves businesses time. Outsourcing is a force multiplier, letting you save time by making someone else do mundane tasks for you. It also gives you access to specialised talent that can do certain tasks more efficiently than your existing workforce.
- It allows for a high degree of operational flexibility. As outsourcing is far cheaper than hiring regular employees, businesses get plenty of choices when it comes to hiring talent needed for the short term. They can get the right people on-demand or scale-up or scale-down as necessary. True enough, flexibility is the main reason why 40% of businesses prefer outsourcing over hiring new employees.
The disadvantages of outsourcing
Outsourcing is not always the ideal solution for businesses, especially if the outsourced work involves sensitive tasks and private information. These are the disadvantages businesses or individuals looking to outsource need to be aware of.
- You’re not guaranteed to get quality service. Not all outsourcing agencies and freelancers are cut from the same mould, and not everyone can fulfil your expectations. You may need to first look into their track record before you decide to work with them.
- There are security risks to outsourcing. You will be handling sensitive information like access to company data and account passwords to people remotely working for your business. This is a security challenge that can be mitigated with caution and safeguards that prevent malicious use of your data.
- Management difficulties may arise. You are not directly managing your outsourced talents, so any change in your outsourcing agency may create management complications in the virtual workspace.
Before you decide to outsource, be sure that you carefully weigh the pros and cons this brings to your business. You can mitigate the risks by hiring a reliable outsourcing company who can provide you with quality talent at the most affordable rates.