How Outsourcing works

Outsourcing is the method involved in recruiting a representative or organization, either locally or internationally, to handle your business activities for you. It’s a business strategy that companies use and has become a common business practice that allows small and medium-sized businesses to gain services and skills they would usually find hard to develop because of either financial or manpower restrictions, or possibly a combination of both. Keeping up with your competitors can be a difficult task, especially if you are new to the industry.

You might find yourself overwhelmed with managing a growing team of people while juggling different projects and initiatives of improving the competencies of your core business functions. Not to mention the increasing expenses that go with it. When businesses are growing, the need for expertise or skills is expanding as well. This causes businesses to outsource jobs and people to solve their problems. Listed below are some of the benefits that businesses resort to outsourcing.

Benefits of Outsourcing


Companies can lower their costs by hiring freelancers who can do specific tasks for them. By doing this, companies are not required to pay benefits or are required to provide office or workspace for their employees. This is the most significant advantage that enables work to be completed at a very low cost and in a much more efficient manner as well.

Expert Workforce

Work is not simply less efficient and of lower quality when it is outsourced. It is done to people or organizations who have a deeper understanding of the job and extensive experience in the field. This aspect automatically enhances the work's quality, and it may be completed quickly and efficiently.

Increased efficiency

By doing everything by oneself diminishes the efficiency of the organization, as many tasks take attention, doing everything by oneself reduces the efficiency of the organization. However, when a company outsources its tasks or labor, it becomes much easier because the outsource partner shares some of the strain. This allows for the rapid transformation of ideas into concepts, as well as the delivery of products, ideas, and concepts into a competitive market.

Saves time

Outsourcing your employees frees you from tasks that take so much of your time, like administrative work. It helps you focus on the core functions of your business rather than managing small tasks.

Disadvantages of Outsourcing

While there are many advantages to outsourcing your business, it also comes with disadvantages that you, as a business owner, should consider when deciding whether to outsource your business process or not. Listed below are some of the most common disadvantages of outsourcing.


When a business outsources the HR, payroll, and recruitment services, there is a risk of exposing confidential company information to a third-party. The risk of losing such sensitive information is the most significant disadvantage of outsourcing. Foolproof measures regarding data loss and confidentiality contracts are a must when discussing deals.

Service Delivery

Once a business is outsourced, feedback and reporting schedules occur mostly on a daily basis, though sometimes business owners request an update weekly. This may not be enough, especially if the delivery is late or the quality falls short of expectations. Measures can not be adopted as quickly as they could be if the department operated internally.

There are hidden costs as well.

You'll sign a contract with the outsourcing firm that spells out the specifics of the service you'll receive. Anything that isn't covered by the contract will result in extra charges. There will also be legal costs to cover the cost of hiring a lawyer to review the contracts and make any necessary revisions. When working with an outsourcing company, keep in mind that they are the professionals in this field. Before agreeing to the terms, carefully review and discuss them.

Off-shore outsourcing, while cost-effective, comes with its own set of problems that any company intending to outsource non-essential business functions must carefully consider. Hidden costs, language and cultural barriers, poor quality, and a lack of customer attention are some of the concerns that can arise. Whether to outsource or keep things in-house is a crucial decision that can make or ruin a company.

The Bottom-line

Check in with Sound Decisions and see what a difference we can make to your business needs by hiring our virtual assistants and experts. Give us a call and explore your outsourcing opportunities with us.

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