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4 Facts about Outsourcing

by: Sarah Joson

Monday, October 6, 2014 |

A decade ago when somebody talked about outsourcing, people will immediately raise their eyebrows and express how they are not in favor of the process. A lot of people felt it was an unethical practice and saw it as some sort of corporate tactic to beef up sales - even if this results to a decline in customer satisfaction. But recently, those who used to dislike outsourcing have turned a new leaf by experiencing firsthand what outsourcing can really do for their businesses.

A post at Entrepreneur.com shares four things that show how outsourcing has changed businesses and even helped small players grow from the perspective of former non-believers.

Outsourcing enables entrepreneurs to fill in the gaps.
Outsourcing is not exclusive for large, expensive, and complex operations. With the rise of freelance marketplaces like Odesk.com and Elance.com, entrepreneurs can easily create an outsourcing plan based on the direct needs of their business. In these portals, thousands of profiles are posted/created by professionals from different fields. It is up to the business owner to select and decide if a candidate is a feasible match to their requirements.  

Through this process, risks and operating expenses are reduced because agreements and payments schemes are flexible - but not too lenient that no work gets done.  All they have to do to get started is evaluate which of their internal processes can be easily outsourced and has minimum threat to the core operation to the business.

Outsourcing simplifies the accounting workload.
Each country has their own unique set of labor codes, but they all have one thing in common - all of them are complex. With outsourcing, the SOP is clients are the ones who set the rules. Because majority of these talents are contractors or are part-time, it is easier for clients to scale the work hours and work load. They are also freed from giving benefits and paying the taxes of freelancers since they should be covered by the contractors themselves.  

Outsourcing gives you access to a larger talent pool.   
Owners of small and medium enterprises know the struggle of finding the right person for the job. In major markets, a highly qualified expert can cost more than what the clients can realistically afford.

If you are not partial with outsourcing to a person offshore, you still have options in outsourcing work to a local provider located in a different city where rates are lower.

Staffing decisions are not personal.
A client can hire a consultant and inform them that the contract or project depends on the performance of the company - meaning if money gets tight, they would need to make adjustments in the work hours of employees including the freelancers. On the contrary, if workload surges, then they would need to extend and even hire additional team members.

This way, business will be strictly business unless both parties have already established a concrete, long-term agreement.

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