Outsourcing Takes Off
By Sherril Steele-Carlin
Outsourcing takes many forms, from common day-to-day services like payroll and accounts payable, to some more unusual services. Even areas like procurement, heating and air conditioning services, and employee eligibility to work status are being outsourced to individuals and companies who can provide cost effective and comprehensive services. Because of this, outsourcing can be a real bonanza for small businesses looking for additional staff and service. Outsourcing can save time, money, and quite a bit of frustration.
Before 1997, many companies were a bit uncomfortable about outsourcing many of their operations, especially in highly confidential areas, such as human resources and payroll. Today, more outsourcing companies specialize in these confidential and highly technical areas. Many of these outsourcing companies are small businesses, owned by a person who worked in the industry, and then used their experience to open their own consulting or outsourcing concern.
A Bad Rap
Lately, outsourcing has been in the news a lot. Many large companies are outsourcing a big part of their employment to foreign countries like India and China. This kind of outsourcing might make sense for big companies, but for small businesses, outsourcing just one or two jobs may make plenty of economic sense.
It's Cheaper
Outsourcing is usually cheaper for companies than hiring a cadre of employees to perform certain jobs. The McKinsey Quarterly also reports it’s profitable for many companies to “Strategically outsource other activities — including many traditionally considered integral to any company — for which the firm has neither a critical strategic need nor special capabilities.” If the outsourcer can work at home the company also saves money on equipment, office space, and supplies.
What's it Like to Hire an Outsourcer?
What's it like to hire an outsourced worker? First, outsourcers usually don't get benefits, so they pay their own health insurance and other self-employment costs, making them more cost effective for your small business. Usually, hourly salaries are a little higher, to help compensate for the lack of benefits. Sometimes the outsourced positions are long-term, and some may only last a week, a month, or a few months. Many companies discover they really benefit from the freedom of hiring extra employees during busy times, and reducing outsourcers when times get slow.
