W
hat is Outsourcing?
Outsourcing is an agreement when a party outside the company is hired for performing the activities which were initially being done by the in-house staff. The jobs are delegated to a third party for handling different segments of the business.
Types of outsourcing
There are four major types of outsourcing:
1. Manufacturing outsourcing
A company goes for manufacturing outsourcing by hiring another company that will manufacture their goods at a cheaper price. Manufacturing outsourcing leads to efficiency and cost saving for the business.
2. Project Outsourcing
Some companies hire a third party seeking help with certain projects as they don’t need full-time employee’s. It helps the companies hire those resources who are experts in their fields which leads to better quality work and higher efficiency.
3. IT Outsourcing
Companies outsource their IT development tasks to remote workers. It includes development of an app, software and technology.
4. Professional outsourcing
It includes outsourcing professional services like accounting, HR, administrative etc. this kind of outsourcing gives access to a global pool of talent and helps in reducing overhead costs.
Do what you do your best, outsource the rest.
What is the need for Outsourcing?
The need and importance of outsourcing are mentioned below:
1. Cost effective:
In various countries like UK and the USA, the skilled workforce is quite expensive because of the minimum wage policies. Hence, the companies opt for outsourcing their work to other countries like India where the wage structure is affordable, and the workforce is extremely talented. The companies save their costs by getting the tasks done in low wages and invest the amount in business development.
2. Greater focus on core business activities
When tasks are outsourced to remote workers, entrepreneurs get more time to focus on their core business activities which in turn helps in developing their business.
3. Access to a global Pool of talent
Sometimes, companies are not able to find the right resources for their projects and tasks in a particular locality, area. Outsourcing is the best way to hire the best workers because it is easy to match the job requirements with the skillset of remote workers.
4. The benefit of time zone
When remote workers are hired from different countries, businesses get the benefit of different time zones and can get their work done 24/7. Many businesses prefer getting remote workers from India as people work 24/7 in different shifts.
5. Saves infrastructure costs
Outsourcing helps to cut down on operational costs, infrastructure costs and other overhead expenses. This cost saving helps entrepreneurs develop their businesses by investing in other business functions.
