Outsourced services and in-house work are two very different concepts. However, both have their own fair share of disadvantages and advantages.
If you are small or medium-sized business owner deciding whether outsourcing is perfect for you, here are some things you need to consider.
What is outsourcing?
Outsourcing means the process of hiring another individual or another company from another part of the country or the world that can provide you with quality products or services at a more affordable rate.
This puts the company in a win-win situation because they can earn a huge sum of money from their clients without having to pay their employees as much.
What is in-house work?
In-house work basically refers to the traditional concept of hiring local people.
Since these employees are working in the same building or under the same branch of the company, the company is required to pay them a salary that matches required pay grade with corresponding benefits and taxes of state.
Pros of outsourced work
- Lower costs – staff, manpower, utilities, travel, communication, etc.
- Quality of work – when work is outsourced, quality of work is guaranteed because only experts will be hired to provide specific products and services
- Increased efficiency – cuts travel time, quicker turnaround time, firmer deadlines
- Access to skilled resources – only experts are hired by the company or business owners
Cons of outsourced work
- Loss of managerial control – managers or bosses are not always around before work can take place remotely
- Security and confidentiality threats – some employees or providers can fake their identities or the information they provide about their company
- Breach of contract – employees or product and service providers can just disappear without any warning
Pros of in-house work
- Direct interaction – managers and employees could see eye-to-eye and can communicate with each other
- Closer monitoring – work can be closely monitored because managers are accessible
- Same time zone – business owners, managers, staff, etc. all work within the same time zone so work begins and ends around the same time
Cons of in-house work
- Costly – incurs extra costs for office space, utilities, travel expenses etc.
- Inefficiency – employees are bound by their contract so even if there’s no work, they still get paid
- Abuse of connections – hierarchy at the workplace can be manipulated
Both outsourcing or back-office service provider and in-house work have their own fair share of pros and cons.
At the end of the day, the decision will ultimately depend on the company’s goals and priorities.
Give us a call so we can help you make an informed decision. We at Tukkolabs would be happy to create ways to help your company.