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Outsource Services – Does Outsourcing Pay Off Well?

In answering this question, it would be best to delve into the incentives that accompany outsourcing. While a lot of people are still wondering whether it pays off well to contract outsource services, a lot of companies and individuals are massively reaping the benefits that come with business outsourcing.

Let’s quickly examine some of the top incentives that come with business outsourcing;

Minimal Operation Cost
For any company or business to record significant profiting, operational cost must be as low as possible. Achieving this level of minimal operation cost is an uphill task when such business functions are undertaken locally. For instance, here in United States, the average cost of maintaining an employee (HR cost) on an hourly basis is significantly high. This situation is worsened by certain government-imposed employee maintenance costs such employee insurance costs, social security costs and others. On the contrary, such costs are not part of business outsourcing contract, especially on an offshore level. So, you can imagine the massive savings that organizations enjoy by opting to contract outsource services.

Contractual Certainty
In addition to financial incentives, it also gives peace of mind in knowing that the contract is legally binding. This provides a legal ground to recoup any loss in the event of damages caused by substandard performance. On the contrary, you may only fire or discipline a defaulting employee in-house, but the company will solely bear the loss resulting from an employee’s negligence or poor performance. The contractual agreement in an outsourcing situation provides the expected performance quality, the specific job to be done, the stipulated timeline for task completion, as well as any other similar grounds that may exist. Consequently, the service receiver can embark on a legal action for breach of agreement.

Core Activities Receive more Attention
This is one of the juicy incentives from choosing to outsource your company’s operational functions. More often than not, the core activities of an organization are neglected. By hiring outsource services, an organization frees up resources for its core activities. Contrary to the opinion of many, the savings from outsourcing is not stored up by the company owners, a large chunk is re-channeled to the heart-beat or core activities of a business.

Risk Management
Most times, the outsourcing vendor is better equipped to manage the risk inherent in a business function. So, by choosing to outsource a business function, a company had tactfully averted a potential risk from such business process, leaving the outsourcing company to bear the potential risk knowingly or unknowingly.

The list of benefits associated with outsource services can go on and on. Finally, these benefits are better experienced than told. Look to the renowned offshore destinations when you have a need to embark on offshore outsourcing – Philippine outsourcing is renowned for efficiency. This is also the case of India, China and other offshore destinations.

Daven Michaels is an award-winning outsourcer and author of the book, ‘Outsource This!’ Daven has been honored more than any other individual or outsourcing organization. You can get more information on outsourcing by visiting www.123Employee.com

7 Responses to “Outsource Services – Does Outsourcing Pay Off Well?”

  1. Jeshiee says:

    Thanks for the info Daven, you have really opened my eyes. You Rock!

  2. Taylor says:

    Life is about rules and those who succeed are the ones that can adhere to them. Perhaps sometime, Daven would give us a more comprehensive list; thanks anyway. Michael.

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