Over the last few decades, outsourcing has become one of the most contentious issues in American politics. Nobody wants jobs to be outsourced, and lawmakers love to use a strong stance against the threat of outsourcing as a rallying point for their larger business agendas.
However, in the world of small business, outsourcing does not always imply sending work overseas. When most small business owners talk about outsourcing, they’re thinking about hiring freelance writers to do content, hiring an accounting firm to do bookkeeping, or relying on an employment agency to find and deploy hired help.
Outsourcing’s Benefits and Drawbacks
Outsourcing, when used correctly and strategically, can be a fantastic way for small business owners to improve efficiencies and boost their company’s bottom line. But that doesn’t mean the practice isn’t not without its drawbacks. Outsourcing isn’t right for every situation, so think long and hard before investing time and energy in outsourcing work.
To get you started, here are 20 benefits and drawbacks of outsourcing from your small business.
The Benefits of Outsourcing
1. You Gain Access to More Experts
Your core team may excel at a few things, but no one is perfect at everything. Companies that outsource specific tasks are frequently able to significantly improve performance by leveraging the niche skills of experts in specific fields.
2. Things are completed quickly.
One of the main reasons why small businesses outsource work is to get it done faster. If you have a small staff, you can get things done much faster by delegating time-consuming tasks to freelancers or outside agencies.
3. You’re Able to Concentrate on What’s Important
Another advantage of outsourcing tasks is greater freedom. By passing on supporting processes, you’ll be able to focus your skills on strengthening and improving the core processes that keep your business running.
4. You Can Share Some Risk
Risk assessment and analysis are crucial components of any project. You will benefit from their enhanced ability to plan for and mitigate potential risks if you outsource specific campaigns or processes to experts in their respective fields.
5. You Have the Ability to Cut Costs
As one might expect, outsourcing piecemeal work is almost always less expensive than hiring permanent full-time staff. Not only will you save time and money on recruitment, but your profit will also be extended due to lower overheads.
6. You Can Work Around the Clock
One significant advantage of outsourcing digital work overseas is the significant differences in time zones and holidays you may encounter. Although this can be a logistical challenge at first, once overcome, it can effectively mean that your business is running even while you are fast asleep.
7. You Can Simplify Project Management
If you choose to outsource work through a variety of specialist freelance websites and online services, you’ll often be provided with dynamic and intuitive platforms that will help you effectively manage what’s being done, when it’s due for submission, and how you’ll be paid. The majority of this can be automated, freeing up your time for more important tasks.
8. You Simplify Work Relationships
Many small business teams are close-knit groups of friends and family, which is fantastic. However, when you’re extremely close to your employees, it can lead to problems when work isn’t being done properly. Outsourcing work allows you to reduce work relationships to simple, contractual agreements.
9. Efforts Are More Targeted
Another overlooked benefit of outsourcing is that it allows you to plan and execute more effective, targeted campaigns and projects that you would not normally be able to take on. This allows your company to take new risks and experiment with new methods of exposure.
10. You Gain Peace of Mind
At the end of the day, choosing to outsource with a reliable individual or agency should give you peace of mind that tasks are being handled expertly and efficiently without you having to worry or lift a finger. What could be better?
Disadvantages of Outsourcing
1. You Lose Some Control
When you outsource work to third-party agencies or freelancers, you lose control over how those tasks are monitored and completed. That shouldn’t be a problem as long as you know and trust the people you’ve hired – but you must proceed with caution.
2. There are hidden costs
Although outsourcing work is generally thought to be less expensive, you must be wary of being taken advantage of. Outsourcing companies or large agencies will typically ask small business owners to sign lengthy contractual agreements with a lot of fine print. If you do not carefully read the terms, you may incur unexpected costs.
3. There are security risks
In this day and age, it’s critical to use customer data with caution. If you intend to outsource processes that require personal data, you may jeopardize the privacy of others or the security of your company by disclosing that information to others.
4. You Reduce Quality Control
Outsourcing firms and some freelancers are frequently motivated by profit rather than a job well done. That means the work you send out may be returned quickly, but it will fall short of the standard and quality that customers have come to expect from your products or services.
5. You Share Financial Burdens
Although it is nice to bring in expert agencies to share risks, it is risky to tie your business to the financial well-being of another company. Again, you must clearly spell out any and all terms and conditions in contractual agreements if you do not want to incur financial penalties if they fail to deliver.
6. You Run the Risk of Public Backlash
If you outsource work to another country (even if it’s just to write a blog or two), your company may face backlash from customers who have taken a moral stance against outsourcing. Right or wrong, for better or worse, some form of criticism is often unavoidable.
7. You Change Time Frames
One significant disadvantage of outsourcing specific tasks is the risk that your freelancers or partner agency will march to the beat of a different drummer. As a result, it may be difficult to synchronize schedules in order to ensure that your customers receive what is promised to them on a consistent timeline.
8. It Is Possible to Lose Focus
Because many outsourcing agencies or freelancers service multiple clients at the same time, the work you send out may not receive the attention it deserves. Depending on the processes you’re outsourcing, a lack of focus could be detrimental to your small business.
9. Things Get Lost in Translation
It doesn’t matter if you’re dealing with overseas freelancers or a talented expert right down the street – when you distribute remote work via email or phone, important instructions are frequently lost in translation. This could cost you a lot of time, money, and trouble.
10. You may face moral dilemmas.
While it may not be an issue for everyone, one major disadvantage of outsourcing is that you may be denying your team or a talented local agency critical work or development opportunities. Growth breeds growth, and by outsourcing work, you may not be contributing to the growth of your community.