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Pros and Cons of Outsourcing

Have you been mulling over the idea of outsourcing one or more tasks or employment opportunities?


With outsourcing growth expected in the years to come, there may never be a better time to learn more about this topic. Before you move forward, it’s imperative to compare the pros and cons of outsourcing. And it's also very important to understand the effectiveness of outsourcing .


Advantages Of Outsourcing

Knowing the benefits of outsourcing will help you decide if this is something that could work for your business. Here are three reasons to give this a try:


1. You Don’t Have To Hire More Employees

When you outsource, you can pay your help as a contractor. This allows you to avoid bringing an employee into the company, which saves you money on everything from benefits to training.


2. Access To A Larger Talent Pool

When hiring an employee, you may only have access to a small, local talent pool. This often means you have to compromise. Many companies have found that outsourcing gives them access to talent in other parts of the world. If you need specialized help, it often makes sense to expand your search.


3. Lower Labor Cost

Every company has its own reason for doing this, with many chasing lower labor costs. You don’t want to trade quality for price, but outsourcing often allows you to get the best of both worlds. By searching a global talent pool, it’s easier to find the right talent at the right price.


Cons Of Outsourcing

Despite the many benefits of outsourcing, you don’t want to go down this path until you compare these to the potential drawbacks:


1. Lack Of Control

Although you can provide direction in regard to what you need to accomplish, you give up some control when you outsource.

There are many reasons for this, including the fact that you are often hiring a contractor instead of an employee. And since the person is not working on-site, it can be difficult to maintain the level of control you desire.


2. Communication Issues

This doesn’t always come into play, but maybe one of the potential drawbacks due to the fact that the worker don't work from office, your question may not be answered promptly as and when required.


3. Impact On Company Culture

As a business owner, it’s easy to focus on the benefits of outsourcing, all without considering the impact it can have on your company as a whole. If you plan on outsourcing, you need to take steps to ensure that it doesn’t have a negative effect on company culture.

A positive work culture leads to a higher level of productivity, so you don’t want to do anything to jeopardize this.


Conclusion

Surveys have shown that the cost saving usually outweigh the negative impact on the company, hence, most of the business owners would still choose the option of outsourcing to reduce labor and training cost in addition to improving the overall business efficacy. Ultimately, in Singapore, most people would agree that labor cost is usually the main overhead cost incurred in any business.


Talk to us, we would be able to help you in overall business productivity.

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