The word “outsourcing” elicits negative perceptions among many entrepreneurs. We will be blank and tell you that we viewed it as exploitative; it was simply corporate companies getting cheap labor at the expense of the customer. However, going by the fact that we have built my consulting business through outsourcing, for the last five years, we now hold a different view about “outsourcing”. The advancement in technology has leveled the playing field and this has introduced new dynamics in this industry. Businesses owners now have a choice between embracing outsourcing and thus growing their enterprises or stand being forced out of the market by competition.
As a business owner, you may hold negative perceptions about entrepreneurship, but if they are costing you profit and market share perhaps you need to rethink the whole issue about outsourcing. Here are four reasons why you could be having a flawed perception about outsourcing.
Freelance market platforms have hit the market making it easier and less risky to hire people. Market platforms such as Elance.com and oDesk.com allow you to easily access a wide and free outsourcing portal. In a few clicks, you can view different profiles, check on the proficiency of different professionals from different parts of the world. These platforms also expose you to a wide set of skills ranging from assistants to high-level consultants. You can sort the professionals based on country, score, feedback and hourly rate to find a person that fits your hiring criteria.
By outsourcing, you can take advantage of the benefits that come with a virtual marketplace. This means less operating expenses for your business. Again, you can match talented consultants based on the work you want done. This is as opposed to hiring general employees who may be lacking certain vital skills in a particular area. As a starting point, and since you might still be skeptical about outsourcing, begin with a low risk task. For instance, you could outsource the activities of a research specialist to work a few hours per week. If the person excels in that task, you can add more hours as your confidence in their work increases.
Hiring employees in some countries such as the US comes with different accounting challenges. This is especially the case with small business owners. You are required to follow IRS rules, pay employment taxes, offer benefits such as paid time off work, and other benefits. These are not only a cost burden, but they create accounting logistics. Outsourcing is simple, you pay for work done and hire when you need the expertise again.
When dealing with employees, you have to refer to work regulation restrictions and comply with them. In some cases, changing the rules can be difficult, and this is often met with resistance by employees. However, with outsourcing, you are at liberty to change the rules as you deem fit. You can increase or reduce their hours as you like. In addition, the contractor is obligated to pay their own tax. You do not have to worry about paid time and the logistics involved. What’s more is that you can avoid the hassle associated with traditional recruiting. This saves you money and time. No need for newspapers classifieds, you can simply look at profiles on LinkedIn and choose the best person for the job.
Every entrepreneur is looking for the best skills; however, this comes with a higher price tag. This is especially the case for those who operate in major cities. Due to budget limitations most end up settling for less qualified workers. Outsourcing does not necessarily mean off-shoring, you can still outsource for skills in your country for a fraction of the cost. In some parts, it costs less for people to get higher education such an MBA, and you can take advantage of these workers without having to bring them to work with your company. They can work with you on a project basis.
Staffing decisions can be emotional and you can avoid this by outsourcing. When you hire a consultant or any other professional, you have the freedom to stipulate their pay and working hours based on how your business is performing. You can reduce their pay or slash their hours during tough financial times. Contractors will understand this as opposed to employees who have a sense of entitlement. Outsourcing has now become a reality for both small and large companies who wish to cut on labor costs. As an entrepreneur, you do not have to restrict yourself to what you can get locally or within your organization. There could be a better fit for your needs out there. It is now entirely up to you to decide if you will capitalize on the benefits of outsourcing.