Finding the right outsourcing location for your business can be a tricky task. Know how to make a successful outsourcing partnership here.
In the business world, several practices and tactics can help companies grow, develop, and achieve certain goals. Outsourcing is one of those strategies that some businesses and startups have dived into to jumpstart their growth. Outsourcing is defined as “the process of obtaining goods and services from another company, subject to a proper contract or service agreement.”
The Advantages of Outsourcing
There are many benefits to outsourcing for businesses and startups. One of these is that it is relatively cheaper in many ways. Choosing to outsource to a location with a low minimum wage helps cut down your company’s expenses. Hiring freelancers also eliminates the cost of providing benefits and an actual workspace.
Another advantage of outsourcing is flexible staffing. Businesses experience peak seasons which sometimes require extra sets of hands. Using temporary or short-term outside workers instead of hiring more in-house employees allows your company to maintain its efficiency when the demand is high. Conversely, you can choose to let go of them when it’s off-season.
Business owners know training employees to learn a skill takes time, money, and effort. With outsourcing, a company can reduce expenses and increase productivity by hiring someone already an expert in a particular task or project. This guarantees a better outcome while simultaneously shortening the production time.
Lastly, outsourcing offers some logistical ease by lessening transportation costs, shipping fees, and the like. Hiring offshore customer support available even outside working hours of the local full-time employees increases customer satisfaction, as well.
These are just a few of the many pros of outsourcing. Choosing the best outsourcing location for your business goals will not only lead to a successful outsourcing partnership but also meet the needs of consumers and lead the way to greater expansion.
Be on the Lookout for the Downsides, Too
Along with these advantages, however, come some disadvantages. Whether you are a novice business owner or a long-time entrepreneur, it is normal to make some mistakes. One of the most common errors in outsourcing is not having an organized interview process.
You may have your set of prospects for the job, but it is crucial to list what your company needs exactly, from the basic things, such as being a good communicator and having work experience, to the actual skill set you require. This will filter out individuals who are not fit for the role and instead lead you to find those who are more reliable and capable.
Another mistake businesses make when it comes to outsourcing is hiring individuals with the lowest rates and expecting great outcomes. There is a reason why they charge very little, and most of the time, it is because they lack skills or experience or cannot commit fully.
It is always better to find someone asking for a high pay rate and be sure of their abilities than risk getting poor results from someone you don’t pay for a lot.
Not securing backup is also one factor that makes outsourcing quite risky. A common mistake is not getting other freelancers onboard. Someone your hires may suddenly be unavailable due to an emergency or not deliver the desired results. It is essential to have other freelancers ready to come in as substitutes when needed.
Choosing the Best Outsourcing Location for Your Business
One more typical mistake is not considering the outsourcing location in their decision-making. As with other aspects of business, choosing the right setting aligned with your goals is crucial. There are several factors to take into account when it comes to choosing the right outsourcing destination.
Data Security and Privacy
Every business has its own sets of confidential information; sometimes, data security and privacy can be an issue with outsourcing. To avoid breaches and leaks, it is important to check on your chosen location’s data protection practices and network security policies.
Linguistic and Cultural Differences
When outsourcing to a different country, remember that there will be some differences in linguistic and cultural practices from your own. For example, some cultures, like Asian countries, follow a more formal and structured manner of working, while Westerners are more likely to be flexible and open to change.
One of the main things to look out for is the ability to speak, write, and understand English well enough. It would also tremendously help to be familiar with the different lifestyles, traditions, and other practices, as these may affect your relationship with your outsourced employees.
Accounting, Taxation, and Labor laws
Similar to data security and privacy, every country has its own laws and policies. Researching and learning about tax regimes, legislation, and so on is imperative if you’re considering outsourcing. This will allow you to comply accordingly and avoid legal issues. Another thing to consider is your outsourcing location’s currency and exchange rates.
Technology Infrastructure
The location to outsource must have good quality and reliable technology infrastructure. Problems with connectivity, availability and security may disrupt or hinder business operations.
Expertise and Innovation
Sometimes, businesses outsource to find individuals who are experts in specific fields. For instance, IT, software development, ecommerce enablement, and similar industries require a level of proficiency not readily available.
Some countries may be able to provide better services; hence, it is best to do your homework and determine your outsourcing destination to choose the right one for your business needs.
Government Support
Besides the abovementioned factors, it is also important to gather government support. A country or region that has a cooperative government will not only make the process of outsourcing easier. Still, it will also give room for more growth and expansion in the future. Training programs, tax relief, and public infrastructure are some good indicators of government support.
A Good Outsourcing Destination to Answer Your Needs
Outsourcing, when strategically planned and applied, will inevitably boost your business. Although it has some risks, errors can be mitigated for greater gains. Venturing into outsourcing requires a lot of knowledge and resources. But once you find the perfect outsourcing provider, they can help pave the way for your business growth.
By: Trevor Michael
