When is outsourcing not appropriate

This can range from bringing in consultants to contracting specific functions like IT help, temporary labor, gig work, or completing special projects. Contractors may be highly specialized or complete more menial and repetitive tasks depending on the situation.

Access to a Larger Talent Pool Typically, companies hire employees that fit specific criteria and job positions. Ability to Focus on the Core Aspects of Your Business Businesses should spend time focusing on what they are good at; this helps create efficiency and increases productivity. Reducing Costs Outsourcing projects and tasks are less expensive than hiring and training full-time employees. These costs include: Training; Onboarding time; Recruiter fees; Deferred productivity.

Increasing Efficiency and Quality Outsourcing experts complete projects professionally. These risks include: Markets; Government regulations; Financial conditions; Technologies. Disadvantages of Outsourcing There are also some disadvantages to outsourcing.

Increased Costs Some outsourcing costs can go unnoticed, especially if a business is working with a firm for the first time. These costs can include: Management and coordination of contractors; Project attrition; Onboarding the firm; Processes costs; Governance costs. Impacts on Company Culture Outsourcing can harm employee morale and company culture.

Loss of Quality Control Outsourcing means giving up some control on projects. It is essential to set up good communication with outsourcing companies to mitigate this problem: Be upfront about quality standards; Delegate parts of the project instead of the whole thing; Set a timeline for the project; Research the best outsourcing firm.

Should You Outsource Your Business? To determine whether your business should outsource, consider the following questions: Do your employees struggle with certain tasks? Is your budget getting tighter? Is progress stalled because of routine tasks? Do your employees lack fresh ideas? Are your managers overloaded? Do you deal with irregular tasks? We use cookies to make sure you have the best experience on our site. Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website.

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On the other hand, loss of control over the outsourced function is often a potential business risk. You should consider carefully the pros and cons of outsourcing before deciding to contract out any activities or business operations. There are many reasons why a business may choose to outsource a particular task, job or a process. For example, some of the recognised benefits of outsourcing include:. Outsourcing can also help to make your business more flexible and agile, able to adapt to changing market conditions and challenges, while providing cost savings and service level improvements.

Outsourcing involves handing over direct control over a business function or process to a third party. As such, it comes with certain risks. For example, when outsourcing, you may experience problems with:.

Offshore outsourcing , although potentially more cost-effective, may present additional challenges such as hidden costs of provider selection or handover, severance and costs related to layoffs of local employees who will not be relocated internationally, etc.

Two, the results may be better then you could achieve on your own, therefore making the extra spend worth while. Interested in reading more about this topic? Read this article as well. The pros and cons of outsourcing. It is written from the view point of off shore outsourcing but sample principles apply. I like the article because I think the the list of pros and cons does a fairly good job of covering all the main things to consider.

As with any decision there are pros and cons to each option. Interested in following me on Twitter? Add me today.

Thanks for reading this article on disadvantages of outsourcing. I hope it was thought provoking. Profitworks Small Business Services Inc.

Profitworks is a company built on the values of integrity, hard work, doing things better than they have ever been done before and the utmost commitment to our customers.

The focus of our all of our services is to provide a positive return on investment to our customers. Disadvantages Of Outsourcing This article is a follow up to my blog article Outsource Advertising Sales , where I outlined the benefits of outsourcing your advertising and sales. Outsourcing Supplier No Longer Able To Supply Your Business This can happen for a number of reasons including the supplier decides they no longer want to supply to you or they go out of business, The good news is that this problem can usually easily be rectified by finding a new supplier to provide your outsourced service to you.

Confidentiality Risk Anytime you involve someone new in your business, whether that be a new employee, a new business partner or a new supplier you increase your confidentiality risk. Loss Of Control Of That Function By giving away a function of your business to an outsource you gain the advantage of having an expert do it for you allowing you to focus on what you do best.