Do you wish to increase your business activities, expand into new markets, or respond to increasing demand? In a lot of instances, to do this, you need more manpower, which is usually people with skills you don’t have in your company.
There are two main solutions available to you: hire new employees or resort to outsourcing.
At the end of the day, you have to pay for the work being done one way or another, but outsourcing has important differences when compared to hiring an employee. In this article, we’ll try to go over its main advantages and disadvantages.
To resort to outsourcing means having another company carry out all or part of the services you require for your business to function. These services you outsource can be related to the inner workings of your company or it can be services that your clients directly interact with.
Relying on outsourcing is often used in the event of additional demand that you can’t organically handle with your current manpower or difficulty in the execution of a particular activity that you and your employees don’t have the skills to handle.
Outsourcing allows you to deal with unusual spikes in demand without saddling yourself with an additional employee that might not be needed for eleven months in a year. Or, it might help you hire experts that can deal with really specialised, unique, non-recurring tasks where hiring an employee isn’t justified.
However, there are two types of outsourcing we should distinguish:
Generally set up in a precise way and/or for a precise mission. Subcontracting will allow you to compensate for a lack of capacity or an absence of know-how in-house.
In this case, you will be the main contractor and you will ask an external company (the subcontractor) to carry out a task on your behalf on the basis of precise specifications.
Outsourcing is more general. It is more of a long-term relationship that allows you to delegate certain undesirable/difficult work to allow you to focus on the principal activity of your business.
By outsourcing, you entrust the totality of a function or an internal service (mail management, payroll, accounting, telephone communication, etc) to a specialized external actor.
In order to be workable, it is necessary that the person you delegate the function to, to have a good, working knowledge of the services you offer and the tasks they need to perform.
Advantages of Outsourcing
You Don’t Need to Hire
You do not have to worry about the legal obligations related to employment contracts and all the rigid legal headaches that come with it. If you’re outsourcing to another company, they could have as many employees as you want, and this won’t affect your business at all.
You Only Need to Pay for the Outcome of the Work
Specific works require specific tools, and most specialized tools and software are extremely expensive. When you outsource to another person/company, you only pay for the end product, you won’t need to pay for all these expensive tools.
You will Have Access to Specific Skills
You have access to a huge pool of people with very specific skills and specialised knowledge. You won’t need to train people in-house and incur costs. It is also easier to access certain skills through outsourcing much more so than employment contracts. For example, WordPress outsource is particularly easy and handy.
You have more Flexibility
In short, you will only pay for the service you really need, without having to invest in additional employees. If you have to handle a huge workload for a holiday, you can outsource the tasks for that particular event alone while working regularly all year. If you want to go the hiring route, you either have to forgo the extra business on that holiday or hire an employee that will be largely useless for most of the year.