Outsourcing has quickly become a household term to the corporate world because of its effective cost cutting results while keeping quality output for clients. However, outsourcing does not only deliver huge chunks of savings for the company. In fact, cost cutting is only one of the many significant pros outsourcing offers, and we listed the reasons why companies outsource and why you should too.
An employer can only do so much with cutting operating costs inside the office, but how about a growing company that needs an expansion of talent pool but doesn’t have the luxury to shell out so much? That’s where outsourcing comes in. But outsourcing is not only popular among growing companies. In fact, well-established companies like Mattel and Fisher Price have been outsourcing with RipeConcepts Inc.
According to a report by PricewaterhouseCoopers Retail & Consumer Industry Practice, about 68 percent of companies in the United States alone use outsourcing. Industries that strongly adapt outsourcing are media and telecommunications, technology, financial services, life sciences and healthcare, and consumer and industrial products. Second to these industries are facilities management and procurement and real estate, which shows the growing direction of outsourcing culture.
The largest drive for companies to outsource is the cut costing benefit. You may notice that along the items that follow, their advantages will also tie back to cost cutting and saving funds. Let’s discuss it a bit.
Unlike the traditional, in-house employment where employees look forward to a company’s benefit package, these things are not expected for outsourced resources, which cuts your operation costs by already so much. This is because outsourced employees are usually paid on a per-project basis or depending on the agreement.
Outsourcing also means companies are paying for the output or the hourly rate. In essence, if you’re an employer, you’re paying for someone to work for you while using their own resources—computers and other necessary devices and the electricity, internet connection, and other necessities that come with, without shelling out anything from your end.
Read more: 5 Effective Ways to Cut Operating Cost
While it is also competitive in the corporate universe, the outsourcing corner also holds a stiff stiff competition of its own. This competition pushes the resources to maintain quality output because there is a common understanding that they can be easily replaced or won’t be called up for another project.
This setup becomes super beneficial for the employers as with the wide array of freelancers ready to jump in projects, a company has every right to be as meticulous as they can be to find the perfect resource for every unique project. This setup assures the company that they always get the best of their outsourced employees.
Expansion of talent pool
From examples of well-known companies that promote diversity and inclusivity like Disney, Coca-cola, Mastercard, more others have been adapting this strategy with their recruitment in the hopes of achieving the same success as well. But there was a time that it seemed impossible to form a team of diverse individuals unless they all live in the same city and apply to the same company, or, even more expensive, if they are absorbed from their home country and relocated to wherever the company HQ is located.
That’s where outsourcing plays for your advantage yet again. With the outsourcing setup, a company has the freedom to choose who to hire, from age, expertise, nationality, rate, etc. without so much as paying only for the talent fee per project or contract. There is no need to relocate, no need to offer extra benefits.
In the pursuit of housing the best key players in the business, outsourcing allows you to hire someone from the neighboring city or someone as far as the other side of the world.
With outsourcing, your pool of applicants and potential employees is literally the entire world, with freelancers who can be connected through the interweb. If we can be perfectly transparent, there are countries who are well-known to excel in a specific field, and it is an ergonomic strategy to hire from these countries to get the cream of the crop while also slowing down on operational costs.
For example, the Philippines has been recently coined the call center capital of the world, outpacing China and India in the Asian space. The Filipinos’ fluency in English and skill of mimicking accents from their home companies in Australia, America, British, etc. plays a significant role in this feat. However, more importantly, the reason why there are now 1.1 million call center workers in the Philippines is because they keep company morale high while keeping operating costs low.
Call centers are just one of them. Design and web development are also in demand in outsourcing with the rise of the Digital Age. And RipeConcepts is one of the most sought-after outsourcing companies in the world for that.
Outsourcing is not only relevant because of the current global economic status. From one business to another, you know any chance to keep sales up and operations cost down is as relevant as any time of the year.
There may be other articles that discourage outsourcing, but with the current statistics, giant corporations like Apple, Nike, Walmart, which have been outsourcing for years, have sure stood otherwise. These are five solid reasons why companies are shifting strategies to outsourcing these days. And these are the reasons why you should too.
If you need assistance for projects you wish to oursource, contact us directly through email@example.com.