Evaluating Effectivity and Costs of Outsourcing

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Efficacy and Costs of Outsourcing Workers/Processes

There’s alot of debate about the true value of outsourcing staff and entire business processes. On one hand, there’s the question of effectivity between people who work remotely from their employer versus the tried and tested efficacy of in-house workers. On the other hand, there’s cost of maintaining traditional employees versus running an entire operation abroad.

Gauging efficacy is as simple as evaluating an individual’s productivity. If a worker is not producing results, then he is not effective. So regardless of proximity, if an employee can deliver, may a person be from across the globe or just a cubicle away, then that person is an effective asset to the company.

Another issue that businesses consider when it comes to effectivity is the relationship between employees, employers, and the business itself. Traditional and conservative businesses equate relationships to physical presence and face to face communication. But most can attest that in actuality, loyalty is not born from physical contact. Employees commit themselves to an organization or to an employer’s ideals, and communicating those ideals is enough to build good rapport and a standing relationship between a business and its people, regardless of distance.

Now, running an entire operation abroad or leasing specific people for specialized tasks is no different from maintaining traditional employees within your office. If you want something done, you send messages and you communicate; and it doesn’t matter if the recipient is just across the room or if the person is a continent away. The right person will get the job done.The only difference with outsourced employees is that you don’t have to pay for overhead costs needed to maintain them. It’s just a simple equation of Work=Pay.

Leasing or outsourcing saves a business from paying for:

  • Insurance and Health Benefits
    Leased staff don’t require contracting businesses to pay them with benefits, their local employers take care of all their health and insurance benefits.
  • Taxes
    Same with benefits, all taxes are paid for by the outsourcing firm.
  • Vacation Leaves/Sick Leaves/Holidays
    Much like traditional employees, leased staff also get sick and have the right to take vacation leaves and holidays; but you don’t have to pay them if they’re not actually working. Again it’s just a simple equation of “Work=Pay”.
  • Hiring and Training Costs
    Posting on job sites and hiring recruitment and head-hunter agencies are incredibly expensive, and training cost just as much if not more. Outsourced employees have specialized skills that require little to no training at all; best of all, their local firms handle all costs.
  • Office Space
    Allotting additional office space to accommodate new employees is an inevitable expense for businesses. Outsourcing staff means saving space as well because their BPO firm provides it for them.
  • Equipment, Computers and Software
    Normally, Business Process Outsourcing firms provide their employees with their own computer systems and equipment. Companies abroad who lease these staff are free from purchasing any necessary systems for the outsourced employee.

There is no question about how valuable cutting costs is to a business. Every dollar saved adds to the company’s growth. The list above includes almost all aspects connected to running a business and could probably save as much as 50% when outsourced.

Considering that outsourced workers are as effective as in-house workers, capable of building the same kind of relationship with the business, all the while cutting substantial amounts in costs, it is no wonder that BPO firms are thriving as much as the actual businesses that hire them.


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