There are two ways to handle specialized matters such as payroll, shipping and IT. A company can either hire experts to handle these departments inside the company or outsource the work to a company that specializes in the field in question. Which method is best is the subject of a lot of debate. The fact is that there are pros and cons to outsourcing various functions of the business to a third party. A wise business owner will take all factors into consideration, see which option best suits the needs of his company and choose accordingly.
The Advantages of Outsourcing
Many functions of a business can be handled through outsourcing
Human Resource Management
much cheaper than hiring local employees. As a result, companies who outsource these jobs can save a fair bit of money. Outsourcing firms are not only relatively affordable but also have experienced personnel ready and available to handle all kinds of work that a company may need. Many companies are discovering that hiring a third party to handle certain tasks is even more efficient than having company employees do the work. This is particularly true when it comes to payroll and financial matters. An outside party often has the time and personnel to catch mistakes and slip-ups that an overworked company employee may miss. Specific tasks like human resource management has even been digitized and brought online by companies that special in HR.
Outsourcing one or more jobs can also relieve a lot of managerial pressure, especially during busy times. If a particular report has to be compiled immediately or a product shipped the very same day, the pressure to complete these tasks falls on the service provider, not the company that has outsourced the work. This helps to relieve unnecessary stress and strain within the office environment, making it a more pleasant and conducive place to work.
The Disadvantages of Outsourcing
One of the main disadvantages of outsourcing is miscommunication. As one is communicating by phone, email or text, there is the very real possibility that the service provider or those working for the provider will misunderstand the company’s instructions. This problem is compounded when a company hires a cheap service provider in order to cut costs. Another primary cause for this problem would be when an English speaking company outsources a job to a foreign company whose employees do not speak English as their first language.
Another problem with outsourcing relates to company security. By outsourcing the payroll, for instance, a company is placing the personal information of all its employees in the hands of a third party. This is something that many managers and even employees may not feel very comfortable with. A service provider that specializes in shipping will need to be given the names, addresses and details of the company’s clients. However, it’s easy to choose a company that has an outstanding reputation. Hiring a company with a golden reputation will make it easy to relax and know that your data is safe.
In most cases, the advantages of outsourcing a particular task or tasks outweigh the disadvantages. There are many experienced service providers that specialize in payroll, IT, shipping, customer service and other fields. However, companies should be aware of what hiring a service provider entails and choose their provider very carefully. It is also important to make clear to the third party what is expected of their services so that mistakes and misunderstandings do not occur. By choosing a quality service provider and establishing good communications, a company can acquire the professional services they need and avail themselves of the many advantages outsourcing has to offer.