Are you having labor-related problems lately? Are you planning to cut your labor or manpower costs? If so, try considering outsourcing your manpower needs to save on labor cost.
Why do people and companies outsource? What benefits do they get from it? Why not choose in-house or local workers? To gain additional information and insights on outsourcing, read the article below.
What is outsourcing? It is the transfer or subcontracting of service to a third-party or service provider, usually a company or a person, for the provision of work or service.
This type of arrangement has been around for several years and becomes popular due to rising labor cost in host countries.
Studies show that customer service, payroll, billing, data entry, medical transcription and article writing are the common outsourced jobs of companies in developing countries.
Companies outsourced specialized process to become more efficient and to save to manpower cost.
Reasons why companies outsource: • To reduce on manpower cost - They find it cheaper to hire offshore workers than to hire local workers because they do not need to pay for insurance, health benefits and bonuses.
• To improve their business focus - By hiring freelancers, firms have the flexibility in focusing on other work to increase workflow, core competencies and lead time.
• To realize unfulfilled needs - They outsourced their products and services to gain access on needs which are not found locally.
• To manage risk efficiently - They believed that risks can be controlled effectively if they hire expert employees from freelance companies offshore.
• To hire better and qualified employees - By hiring expert and experienced freelance workers, companies can gain access on specialized and expert service at lesser cost.
• To stay competitive and profitable - Hiring outsourced labor and services, they get the best work and services, thereby, boosting their competitiveness and profitability.
It also lowers labor costs because they do not have to pay for health insurance, overtime pay, bonuses and other employee benefits.
If it is your first time to outsource a product or service, you have to be careful in choosing a service provider to avoid flaws and problems along the way.
Make sure to check their credibility and reputation by asking their previous clients' number to assess for feedback and quality of work.
Precautions: Before you outsource any job or service, make it a point to check for provider's feedback to rate their speed and quality of work.
Make sure not to hire any freelancer who does not have outstanding feedback from their previous employer, otherwise you are risking the quality of work and service which you intend to outsource.
Avoid paying upfront or advance payment because there are some providers who do not produce the service or work on time specified and it would take you longer to get your money back.
Make sure to release money only after they produce quality work on time and to avoid becoming a victim by unscrupulous individuals.
Lastly, always remember to act with caution always to avoid risk.