We are in a global business world where economies are interdependent and competencies surpass borders. We are definitely in a situation where you should look beyond the US for the best employees. While outsourcing comes with great benefits, it also has some major disadvantages, such as losing control of the workforce and management process to a third-party company. To clarify, we will discuss the disadvantages of outsourcing and why they exist. This way you will understand what you are missing out on when you get an outsourced solution.
What is Outsourcing?
Outsourcing is a business practice where a company hires another company to perform a task, process, operation, or even a complete service. Outsourcing sometimes involves transferring employees, assets, and/or responsibilities from one firm to another.
We’ve all heard of companies outsourcing call centers, IT services, manufacturing, and marketing. The list is long, but the goal is clear: take advantage of another company’s resources. In other words, instead of hiring new, internal employees to do tasks and projects, you hire an external employee from an outsourcing company to do it for you. It’s a simple solution, with some possible downsides, as we shall also see.
In a Forbes article, marketing specialist Erik Huberman talks about the importance of focusing on what you do well: “When launching a business, it’s critical to do what you are good at; sticking with your core competency is an absolute must.” For areas outside your core competencies, you may choose to bring in extra help.
It’s important to understand that when you search for new employees, you want people who are not only exposed to but also understand your company’s values. This is equally true when you try to identify the best solution for your needs. The reason why I mention this is that I have seen leaders inaccurately use the term outsourcing to describe their solutions.
Here is a video where I clarify this common mistake:
5 Main Disadvantages of Outsourcing Recruitment
Before deciding to work with an outsourcing company, you must learn the drawbacks that your business might experience with this type of arrangement.
These are the five main disadvantages of outsourcing employees for your business:
1. There’s Less of a Fit With Your Values
As you grow your company, you’re not only looking for skilled people, you’re looking for employees who are a cultural fit for your organization. You want your organization to grow based on shared values and ways of doing business.
When you’re outsourcing instead of bringing in new employees, you have less of an opportunity to ensure that your new employees fit with your company’s philosophy. These employees may have the skills that you need, but since they may not be with your company for the long term, they may not hold the same commitment to your company’s vision.
2. Outsourcing Brings Less Consistency
If you’re bringing in freelancers or temporary employees, one of the advantages is that you don’t tend to feel as concerned if you need to let them go. You can work with people when you need them instead of paying an employee every day. However, the downside to this flexibility is less consistency, particularly if you’re working with many different people over time.
For example, if you find an administrative assistant during a busy time of the year and bring on a new assistant next year, you constantly have to train new employees and teach them about your systems and your customers. While the job gets done, the turnover of a temporary employee is still a loss and provides less consistency in customer service.
3. Fewer Growth Opportunities
When you work with employees or remote workers over time, they have an opportunity to grow into their positions. They’ve asked the questions, they’ve made the mistakes, and they understand your customer base. Entrepreneur magazine says that “some tasks make sense to outsource initially and bring in-house later.” In-house or long term interactions allow you and your employees to grow together in your positions, making plans for how to improve in the future.
4. You Lose Control Over your Team
Another of disadvantage of outsourcing recruitment is that you lose control of your team. Not control in a micromanager way, but control over how things are evolving in your team and project. As the business manager, you may not understand the depth of each of your employees’ specialties. Still, you do need to be able to ask questions and understand the overall picture of what that employee brings to your company.
If you’re outsourcing your technical help, you aren’t necessarily as deeply connected to your tech support team. When you want your finger on the pulse of all aspects of your business, you need to be able to have long conversations, ask questions, and get to know each part of your business.
5. There’s a Higher Risk
While your business is welcoming, there’s probably some information that you’d like to keep to yourself. Whether this is financial information or product-specific technology, every business has its internal workings that don’t need to be made public. When you’re outsourcing, you open your business to others, and you need to determine how comfortable you are with people who aren’t employees accessing your company’s data.
Also, keep in mind that you also have a higher risk when you outsource when it comes to results and the outcome. You can’t fully control the processes and the way your external “employees” work, and therefore, you have no control over what the result would be like. In some industries, this happens more than in others.
One of the main disadvantages of outsourcing IT talent is that you can’t control the entire development process as you would if it were your internal team. And therefore if developers choose to work with other methodologies or make other processes, it will be harder to establish control because they are not your employees.
The Advantages of Remote Staffing
With remote staffing, you gain the advantage of a flexible, inexpensive workforce without losing the strategic advantage of losing control and culture. In fact, the difference between remote staffing and outsourcing is that when you outsource, you lose control of the workforce and management process to a third-party company. Here are some of the reasons why remote placement might be. better fit for you:
1. More Control
When you hire a full-time remote employee, you directly control your employee’s tasks, priorities, and timelines. You don’t need to filter everything through different managers that might misinterpret your requests and delay the work.
2. Integration with Your Management Process
A remote employee works within your internal management process and even follows best practices. He/she also works with the same tools as the rest of the staff.
3. Reduces Employee Turnover
Since the remote staff works directly for you, they are more loyal, happier, and feel a greater sense of ownership. This translates to less chance of staff leaving than in a typical outsourced environment where the employee works on several accounts.
4. Increases Productivity
One of the significant advantages of remote staffing is that it maximizes productivity. A remote employee is part of your organization and can be trained and evaluated for the long term.
5. Consistency in Company Culture
A remote employee follows your company’s values, ethics, and rules of conduct.
Remote staff interact better with local staff, have a better understanding of the company’s wants and needs, and simply blend in with the team.
Conclusion
Although outsourcing can provide valuable benefits—such as cost savings and access to specialized expertise—it also comes with huge drawbacks that you must carefully consider. A better solution can be
remote staffing. As mentioned previously, you will still control your processes and have a full-time remote employee who works within your management processes and around your company culture. What can be better? And if you are looking for a great remote staffing solution, well, you’ve picked up the right blog. We provide remote tech staff. We focus on bringing the best people to you from around the world, and we can help your business overcome the disadvantages of outsourcing while maintaining the advantages of a global workforce. Contact us today for more information about how we can help your business grow. Feel free to contact us when you are ready.
