The Outsourcing Decision

Outsourcing is an attractive alternative to hiring employees. The question is when to outsource and when to hire? The outsourcing decision is never easy, but this outsourcing advice may help you make the right choices.

Outsource or hire? It's a decision thousands of U.S. small businesses face every day.

The Outsourcing Decision

Although in some sectors there is a lot of passion around the topic, you can't afford to base your business decisions exclusively on public opinion -- especially when you consider the potential advantages outsourcing can offer your company.

Still, there are a number of scenarios that can make outsourcing a bad business move. You've heard about the benefits and risks associated with outsourcing and now it's time to make a decision. But what factors should guide the decision-making process? We've got you covered with the considerations that affect the outsourcing decision.

  • Motivation. There are right reasons--and wrong reasons--to pursue outsourcing. If you are looking at outsourcing strictly as a way to save money, you may be disappointed with the results. Sure, you'll save a few bucks. But if there are other factors working against you, the money you save may not be worth the hassle.
  • Scope of project. Certain projects, especially those that are directly related to your company's core business functions, are not good candidates for outsourcing. You should be looking to outsource projects, tasks and processes that distract either you or your staff from performing functions that have a direct impact on your ability to achieve your mission.
  • Preparation. One of the most important questions to ask yourself is whether or not your business is ready for outsourcing. Effective outsourcing will require you to carefully package a project or job that can be done by a third party. If the parameters of the job aren't clear or if it requires an evolving set of job requirements, it might be better to assign it to an existing staff member or consider bringing on a temporary/permanent hire.
  • Control issues. As an owner or manager, you will also need to decide whether you are ready to cede a certain amount of control to a third-party provider. Even though the job requirements will be clearly described in the contract, the manner in which the outsourcing provider meets those requirements is largely out of your hands. If you are a hands-on owner or have a tendency to micromanage your employees, outsourcing could be a recipe for disaster.
  • Negative perceptions. Like it or not, some people are going to have a hard time adapting to your decision to outsource, especially if you use an offshore outsourcing provider. Unless you are prepared to deal with the PR ramifications of your decision, you're probably better off choosing a direct hire.

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