The word “outsourcing” is defined as having someone who “is not an employee” of the business or company perform certain tasks or duties that could otherwise be done by someone on the company’s payroll. This phenomenon actually began centuries ago, although it’s only been highlighted in the last 20 years, as more and more call centers and business process outsourcing (BPO) firms mushroomed in the US and overseas. Here’s a look at why outsourcing is more than just “cutting costs”.
Outsourcing Is Now A Global Trend
The days when a person only worked for one employer all their life are all but gone. Today, more and more people are finding out that they’re being “replaced” by outsourced workers, with the jobs being sent a local or overseas programmer, virtual assistant or search engine marketing subcontractor. Thus, when you call a car insurance, mobile phone or Cable TV Company’s 1-800 number, you’ll most likely be speaking to someone working overseas (or in another city).
It Started As A Cost-Cutting Strategy
In the early days of the modern outsourcing era, jobs like customer service, content writing, medical transcription and web developer were farmed out, so that the company can cut salary payments. Today however, outsourcing is a measure that’s done primarily to reduce overhead costs, and drive up productivity.
Outsourcing Allows Companies To Tap Into The Global Market
It’s not just manufacturing costs, taxes and salaries that most small, medium and large companies worry about today, but the “shortage” of local talent too. This is the reason why many technology firms in the Unites States are setting up research and development centers in places like the Philippines and India, so they could tap into the pool of the web developers, programmers, systems analysts in those areas.
It Allows More Flexibility With Staffing
Another major bonus of outsourcing is that it allows companies to hire additional staff or bring additional resources during peak periods, and release them when the job is completed. In essence, outsourcing makes it more flexible for companies to operate.
For example, if a mall or shopping center wants to promote products or services online before the Christmas season starts, they hire SEO professionals or social media marketers to bring the message across to potential clients on the Internet. Once the holiday season ends, the company can opt to end the seasonal project.
It Offers Better Operational Control
If certain departments or units in a company are starting to get poorly managed, outsourcing could be the answer to this problem. This is because the outsourced contractor will be tasked to manage the department in behalf of the client. For instance, a publishing company that is running so many projects could choose to outsource some content writing tasks offshore or locally, for the fraction of the price if it were done in-house.
When done for the right reasons, search engine marketing experts and outsourcing companies can actually help companies widen their reach, save money, and focus on important core activities.