[ return to list ]

The Pluses and Minuses of Outsourcing

Outsourcing a sound business practice for companies that are currently strapped for cash and/or specialized labor. The concept is simple to understand: Rather than assigning all-encompassing responsibilities to in-house personnel, the company hires one or more outside firms to handle specific jobs.

For instance, your company may bring in an independent firm to assist with new technology. However, outsourcing may involve more than just the computer consultants. These outsiders can range from payroll managers to engineers to human resources personnel.

Caution: Outsourcing is not always the answer to a company's problems. In fact, in certain cases, outsourcing can actually be the cause of some problems. With that in mind, here is a quick look at some of the potential “pluses” and “minuses” of outsourcing.

On the plus side:

*Outsourcing provides you with access to workers with specialized skills or talents that in-house staff members may not possess.

*Your company saves costs on training employees and keeping up-to-date with the latest technological advances.

*Employees are more productive and are able to spend more time on jobs where they excel.

*Because some work is usually off-site, your company can utilize more space for other business operations.

*Outside firms usually are not affected by internal jealousies or office politics.

On the minus side:

*Outsourcing does not encourage loyalty from regular employees (especially if jobs are eliminated as a result).

*Employees who look forward to new challenges may end up frustrated and stuck in a rut.

*In-house workers and representatives of outside firms often clash.

*When outsourcing becomes prevalent within a company, it may become more difficult to attract high-quality job candidates.

*Even if outside firms come highly recommended, they may not be able to provide the services that you need.

As you can see, outsourcing may have a positive effect on the bottom line. But if things do not work out, you could be wasting time and money without achieving the desired results. Then you are back at square one.

Practical advice: Instead of leaping headlong into outsourcing, you might try it on a limited basis before deciding whether this technique will work for your company.

 

[ return to list ]