Outsourcing and the future of work

by Swati Rungta & Sharad Agarwal

Outsourcing is a common practice today. It can help businesses grow in many ways, allowing them to find experts not readily available in-house, saving time and money, and helping get new points of view and fresh ideas from outside. The rapid transition to remote work and nimble operations simply highlighted a number of issues that already plagued many companies.

Outsourcing is advantageous to many businesses because:

It’s more cost effective than hiring a full-time staff member;
Companies don’t need to invest in training a current employee;
The responsibility for tax and employee benefits falls on the freelancer, not the employer;
They will be hiring an expert in that field.

Outsourcing can also help to make businesses more flexible and agile, able to adapt to changing market conditions and challenges while providing cost savings and service level improvements.

On the other hand, outsourcing involves relinquishing direct control over a business function or process to a third party. This comes with certain risks. For example, when outsourcing, a company might experience problems with:

Service delivery (delays and/ or lack of quality);
Confidentiality and security risks;
Lack of flexibility – the contract may prove too rigid to accommodate change;
Management difficulties – changes at the outsourcing company could lead to friction;
Instability – the outsourcing company could go out of business.

If a company plans to outsource services, they should clearly define their purpose and carefully select the service provider. Some questions to cover:

How long has the service provider been in the market?
Who are their main clients? Get references, testimonials, and work samples.
Check how often they train their staff, and confirm their skill sets.
Learn about their work culture and core team.
Know how they communicate.
Compare services, delivery times, and pricing of several service providers.
Does the service provider know your company? Did they research your company’s philosophy, objectives, target group, etc.?
Does the service provider convince you that they will achieve your goals, and that their work will be beneficial to you?
What’s your first impression of the service provider? Review the appearance of emails, website, social media accounts – are they consistent, professional, informative, high quality?
Carefully check the contract.