Pros and Cons of Outsourcing for Your Company

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As the company grows, leaders often find the need to have additional hands to help them keep up with business demands. Unfortunately, hiring new staff is a challenging process. Not only is this time-consuming, recruitment often comes as costly and risky. Any wrong hiring move can bring monetary damage and, even worse, affect the workforce’s morale. If you want to hire the best talent in the industry without all of the headaches, hiring people through outsourcing comes as a great solution.

Pros of Outsourcing

There are plenty of reasons why outsourcing can serve as the best recruitment solution for your business. Outsourcing has the primary advantage of increasing effectiveness, both in terms of time and cost, as compared to recruiting permanent employees. Here is a more in-depth explanation.

1 . Lower Expense for Long Term Benefits

Upon hiring permanent employees, HR managers must prepare a lot of papers to support these talent’s work arrangements. Besides ensuring compliance with employment laws and regulations, managers also need to make financial budgeting for long-term advantages such as social security, health insurance, and a holiday bonus. It goes without saying that the process of in-house hiring is long and tiring, starting from posting job ads, reviewing applicants, completing background checks, to conducting interviews and medical examinations. These steps can be shortened if you outsource your employees. As outsourced employees are typically contracted for a limited time span, there will be no need to subscribe for welfare benefits or long-term health insurance.

2 . Retaining Employees Who Are on a Leave

Another advantage of outsourcing is that you can use it to support the work of in-house employees who are on leave. If your company has a sabbatical leave policy, you may be concerned about the open position but reluctant about hiring permanent employees because the vacancy is only temporary. The same goes when there is a temporarily vacant position due to an employee taking maternity leave. As talents are needed to work for a limited time, outsourced employees may be a viable option for filling this vacant position. Having outsourced employees backup a certain position can encourage the retention of employees who are on leave while ensuring that your business operations continue to operate smoothly.

Cons of Outsourcing 

Just like anything else; outsourcing comes with its own drawbacks. In some cases, not having to provide maximum benefit to outsourced employees means being prepared to receive results that are weaker compared to those delivered by permanent employees. Here are two main drawbacks of outsourcing.

1 . Risking Company’s Privacy

One of the most anticipated cons of outsourcing is privacy. If your company deals with a particularly confidential business model, you might want to rethink outsourcing your staff. Although outsourced employees can be subject to a Non-Disclosure Agreement (NDA) that enforces confidentiality, having them may put your company's privacy at stake. This can take various forms, including intellectual property, unpublished patents, business ideas, and many more. However, if you are confident that the company has preventive measures against these threats, you can proceed with hiring outsourced employees.

2 . Rigid Communication

When you hire permanent employees, you can expect more than just qualified skills and work competence, but also loyalty and passion to your company. This is rarely found when you work with outsourced employees. Although outsourced employees may work full-time office hours all throughout a predetermined contract period, you may still have concerns about their motivation. Outsourced employees' objective is to get the job done, which may discourage them from embracing your company's values. This would be very visible in terms of communication. If your permanent employees might not mind being approached for urgent concerns suddenly when urgent, your outsourced employees might. You may have to accept the fact that they will not be as friendly and communicative as in-house or permanent employees. You may also need to change the openness of your communication, as they may not be familiar with how you communicate in your company.

Most Common Outsourcing Job

Outsourcing allows companies to keep costs low while having access to competent talents, ensuring productivity in the business operation. However, not all jobs can be outsourced. There are jobs with a high level of confidentiality that may be risky if being handled by outsiders. On the other hand, there are jobs that will be easier to run by outsourced employees. 

One of the most common jobs to outsource is customer service. As a company gains traction, it may need additional customer care employees to interact with customers and cater to their needs. If it is an in-house team, such ongoing expansion requires extra operation costs. You may improve client experience without spending a lot of money if you outsource your customer support workforce to a third-party talent provider.

To Outsource or To Not Outsource?

Having known about outsourcing, including the benefits and drawbacks, may not be enough to convince you to do it right away. Making sure that this strategy is agreed upon by all stakeholders is critical to ensuring that the outsourcing process is worth the effort. Discuss the issue with top-level management and the CEO to examine whether outsourcing can benefit your company's operations. Only after you have achieved an agreement can you go on to the next stage of selecting a talent outsourcing provider.

Outsourcing may not be the answer for all businesses, so if yours is not one of them, there are still other options to help ensure that your business goes well! But, if you are ready to proceed with one, don’t hesitate to contact Talentvis and we’ll be there to help!

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