Business owners consistently need to do more with fewer resources. If you’re in this position, you may have thought about outsourcing. Hiring others who are experts and not having to staff your own business for those tasks sounds like a great idea.
Sometimes, outsourcing works well for a small business. However, it’s far from perfect. There are tasks that a business owner shouldn’t outsource, even if it saves money.
How do you know whether outsourcing is right for your company? Read on to learn more.
Outsourced vs. In-House Work
Part of choosing between outsourcing and in-house staffing Is understanding what’s required with each option.
When you do tasks in-house, you need both the people and the infrastructure to accomplish the work. For instance, you not only need an accountant, but you also need accounting software, written processes, and a plan to create the right documents at the right time.
On the other hand, outsourcing allows you to find another service provider who already has those things. However, you need to carefully review the businesses you consider to ensure they have high-quality results. The last thing you need is to partner with someone who damages or embarrasses your company.
Done well, both in-house staffing and outsourcing can be a benefit. However, done poorly, they can hurt your operations and your reputation.
When to Outsource
There are specific times when outsourcing makes a lot of sense. For instance, if the tasks are not part of your company’s core competencies, you may want to allow experts to take over.
Also, you started your business because you researched your industry and chose wisely, but you certainly don’t know it all. If there’s something you’d benefit from getting a different perspective on, bringing in someone from outside the business may make sense.
Companies often outsource when they have a short-term need. In those cases, spending the money on employees, software, and other infrastructure doesn’t make sense. Outsourcing allows you to take advantage of others’ specialization for a short time and then move on.
Outsourcing also makes sense if you have a good provider that can save you money and take care of work more efficiently than you can. You can save money because in many areas the expected salaries are lower than in the U.S.
When you can get better work at a lower price, outsourcing can be a great choice.
When to Keep Work In-House
On the other hand, there are definitely times to keep things in-house. If you need control of the process, keeping things in your own company will allow you to define your own procedures.
Direct communication with customers is also best kept in-house. Many clients will react poorly if they feel they’re reaching a customer service representative outside the country. There’s a strong consumer perception that outsourced customer service is lower quality and that the representatives don’t understand concerns.
If you have a long-term service need, it may be worthwhile to create that expertise in your own company. If confidentiality is a concern, outsourcing should definitely be avoided.
Outsourcing can save you money on your overheads. It can also give you the opportunity to tighten up your talent development plan for your internal employees. If you’re not wasting time and effort on training and developing peripheral positions, you can focus your development plan on the positions that truly matter, offering training that will benefit your employees as well as your bottom line.
Is Outsourcing Right for You?
There are clearly pros and cons to outsourcing vs keeping work in-house. Many of the most successful companies use a combination of both.
For instance, you may outsource your accounting while keeping your customer relations team in-house. Or you might outsource when it makes your company more efficient but keep things in the office when employee engagement and loyalty are essential.
This guide should help you decide when to outsource and when not to. When you use both effectively, your business will be able to grow efficiently and profitably.
Noah Rue is a journalist and content writer, fascinated with the intersection between global health, personal wellness, and modern technology. When he isn’t searching out his next great writing opportunity, Noah likes to shut off his devices and head to the mountains to disconnect.