The Benefits and Detriments of Outsourcing

Lake Effects Blog

Wednesday, April 23, 2014

Whether you operate a large or small business, there are some tasks that are better managed by specialists.   Not every business has the budget or the bandwidth to hire top talent in key personnel areas on a full time basis, but the ability to access this expertise is important in competitive markets.   Is it only the small businesses that are outsourcing or has it become a growing general trend in business?  Let’s discuss and weigh the advantages and detriments of outsourcing, and how effectively contract staff can be integrated into your organizational team to provide quality results.

How to Conduct a Skills Inventory

Conducting a skills inventory on your organization is much the same as conducting one on yourself.  As a Manager, be honest with the talent pool and expertise that you have internally.  What does your project require?   How much of that talent, experience and expertise exist within your internal teams?  Finding the provisional gap will help you to identify what needs could be fulfilled by a contracted consultant.

There are other questions to ask when planning resources for your project:

  • Are some staff burdened with tasks that, if outsourced, would improve their productivity?
  • What are the long term and short term fiscal costs of outsourcing?
  • Does the task require internal experience, i.e., strong internal corporate or brand knowledge to complete?

Managers may hesitate to outsource as they fear the costs involved, maintaining security and other concerns.   Think of your outsourcing needs as an elastic band.  When you require the resources, you can expand to take on the extra staff that you wouldn’t normally need in your day-to-day operations.  You have access to professionals with skill sets that bridge the gap between the talent you need and the talent you possess with internal human resources.    

What can I outsource for my business?

  • Specialty Consultants
  • Payroll services
  • Social media management
  • Graphic designers
  • Event planners
  • Content writing
  • Janitorial, environmental or disposal services

Outsourcing doesn’t eliminate the need to hire competent staff.  Instead it allows you to hire specialists in the field at a fraction of the cost of keeping certain jobs in house.  And an added benefit of outsourcing is the opportunity for staff to learn from consultants.  In some cases organizations can find excellent candidates for hire by outsourcing to talented individuals on a per project basis.   It is an effective way to field test a candidate by evaluating their ability to integrate with your team.

The Risks of Outsourcing

Naturally there can be a downside to outsourcing personnel.   Managers and Human Resource professionals can risk alienating full time employees by introducing consultants to a team.   Data can be compromised or sensitive information or intellectual property can be lost when shared.  There is also the risk of inappropriate recruitment of staff by external parties and of course conflict between internal staff and hired consultants.

Do these risks outweigh the value of having a collateral talent on-board for your project?  Tell us what you think by leaving a comment below.

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