Why Outsourcing

Many companies embrace outsourcing to reduce costs, though this is by no means the only benefit to contracting with businesses overseas. As Forbes recently pointed out, 300,000 jobs in the US are outsourced, and reducing labor costs is a primary reason many businesses choose to do it. The fact remains that businesses can hire a worker in the Philippines at a substantially lower rate than what they would pay a worker in the US, Canada, or the UK. It’s not uncommon for businesses to consistently save 60% on labor costs when they contract with an outsourcing firm in Asia, and in many cases, the savings can reach 80%.

But there are other benefits of outsourcing that are equally attractive.

  • Save on capital investment: When work is outsourced, the partner who takes over the outsourced work, make necessary investments in office space, IT, office furniture, and other capital costs.
  • Cost cutting on training and recruitment: When a particular type of work is outsourced, the client company is not required to employ recruiters, trainers, or supervisors. This is an enormous hidden cost to employment that is often overlooked in calculating the cost of each employee.
  • Round the clock work: Outsourcing has a great time zone benefit. Asian BPO offices operate 24 hours so the outsourced tasks can be accomplished when needed. There is also rarely any extra cost for weekend and holiday employees.
  • Faster results: As opposed to requiring that all mundane details be handled by senior team members, particularly in lean organizations, outsourcing frees up precious creative and productive brainpower by the savvy business leaders running a company. This enables faster development of ideas into concepts and faster delivery of concepts into products in the competitive market.
  • Overcome seasonal fluctuations: Outsourcing enables better control of seasonal workforce demands, without incurring the financial, organizational and emotional costs to hire and lay off employees.

Leave a Reply

Your email address will not be published. Required fields are marked *