When to Outsource?

People usually think that companies outsource some of their functions to save on money. While this has been true in the early days of outsourcing where companies enjoyed the savings from properly implemented plans, they  have also realised some additional benefits from outsourcing. Generally, when either one or more of the following occurs, it is best you consider Outsourcing as a viable option:

  1. Vacant positions are open for a long time.
    Your HR is facing a dwindling pool of qualified people for the open positions. In a tight labor market, outsourcing lets your HR source from a wider pool of potential star performers. You won’t be limited to hiring from your immediate vicinity.
  2. Uncertainty with Market conditions. 
    Management would like to have a more flexible and nimble operation that is not weighed down by a high fixed headcount. Think: Peak and low seasons. It is nice if you can forecast the future growth of your operations, and maintain your staff, but what happens in a downturn? It is easy to hire, and sadly, hardest to fire/layoff people.  By outsourcing your spillover work, you maintain that flexibility and are relieved of having to lay off extra workforce in low seasons.
  3. Quicker time to Market.
    Sometimes your project/s needs that top talent and you can’t wait to train/develop your in-house talents. Outsourcing enables your company to tap on the expertise and specialization of outsourcing companies in what they do best. Your in-house talents can work beside your outsourcing provider and hopefully, your inhouse talents can absorb the best practices and accelerate their own expertise.
  4. Minimizing Operational Risks.
    Sometimes, it just makes sense to ‘not put all your eggs in one basket’. Outsourcing enables your company to spread your manpower over geographic distances. This makes a lot of sense when the next global pandemic or catastrophe hits your main operating region.