Financial Data
Updated 29 Sep 2020

The outsourcing option

Hiring staff is not the only way to increase your capacity to deliver.

02 April 2012  Share  0 comments  Print

All the answers to your unique business lifestage questions

Outsourcing to contractors or freelancers is a handy way of dealing with a sudden influx of work, but you have to know what you are doing to make the arrangement work for both parties.

The PROs of outsourcing:

  • Critical expertise now: Outsourcing allows you to pull in essential expertise when - and only when - you need and can afford it.
  • An objective perspective: Really good contractors will tell it like it is and, if appropriate, "fire" you if you're not enabling them to do the job for which they were hired.
  • Cost savings and control. Many businesses embrace outsourcing as a way to save and control costs. Contractors who specialise in a given function can usually perform that function more efficiently and cost-effectively than businesses that try to do it themselves.
  • Staffing levels. Outsourcing helps to minimise fluctuations in staffing as a result of changing demand for a product or service. It also reduces the workload on employees, freeing them to take on additional money-making projects, or to pursue more development opportunities.
  • Accountability. A contractor who does not perform will not be paid. Employees, however, don't always have the same motivation.

The CONs of outsourcing:

  • Poor quality control. If a contractor is not based at your building, it is difficult for you to oversee the process.
  • Decreased company loyalty. A contractor who is not part of your company may not have the same goals and broader accountability as you.
  • A lengthy bid process. Selecting a contractor for each project could take more time than you have.
  • A loss of strategic alignment. Being at separate locations, and not being part of the same company, could lead to diverse and possibly conflicting ideas in approaching and completing a project.
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