Outsourcing or contracting work has become one of the biggest options that small to medium-sized companies are looking into these days.

Some companies believe that outsourcing work elsewhere could give them huge savings. For instance, not having an actual office space that you need to pay for could definitely lower your costs. When work is outsourced, employees can work remotely or from home.

On the contrary, there are also some costs to outsourcing because shifting from office to outsourced work definitely has some up-front or hidden charges.

One of the most important things to ask yourself is: Can you afford outsourced work right now?

How much does outsourcing cost?

It is a common misconception among small and medium-sized company owners to think that outsourcing work in other countries could cut down their operational costs tremendously.

When you hire out your IT-related tasks for example, you may only save a meager amount in terms of the employees’ salaries.

However, shifting from office to remote work also has some costs to it.

Other than the cost for transitioning, there is also some cost when it comes to hiring vendors.

How much to pay for vendors?

Take the call centers as an example for outsourced work. Some companies in more developed countries open a counterpart to their office in a different location.

Such outsourced work still requires a physical office where employees will report at on a daily basis.

Before a business owner can open a company in another country, he or she should first do some researches. Ocular visits are also mandatory to know whether or not a particular office space is perfect for the job on hand.

All of these efforts also require a huge amount of money. So in the end, the money you can save from hiring local employees will just be used to pay for other things.

Layoffs have costs too

Some company owners forget that there’s also a cost when you decide let go of your employees just so you can hire new ones from other parts of the world.

Unfortunately, when loyal employees are let go of in an attempt to cut cost, there are no guarantees that the newly hired ones will also be as competitive as the former.

In the end, it is definitely a must to know which is more important for the business owner: security and loyalty from employees or huge income but only for a short period of time.

It cannot be denied that there are tons of benefits from outsourcing, but there are tons of downsides to it too.

Hiring back-office service provider can save you money, however, manage your expectations as quality don’t normally come cheap.

In the end, choose to outsource your work if you believe that it can provide you with more advantages than disadvantages.

Contact Tukkolabs for more information.

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