Benefits of Outsourcing

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Introduction
Outsourcing is the practice of businesses using other firms to perform activities that would otherwise take place in a company. Most small businesses outsource activities like recruitment, accounting, and payroll among other functions. It has many pros and cons and it is up to the management to decide what works for the company. Benefits of outsourcing include cutting costs, increasing efficiency, reducing the cost of labor, lack of expertise and risk sharing. It also provides employment and income for the outsourcing company. So many companies have come up and they are specialized in carrying out different activities (Beesley np).

Cutting costs
One of the main reasons businesses outsource is to cut costs. Businesses exists to make profits and income and one way to maximize profits is to cut costs. Outsourcing helps the firms to save money that would be allocated to paying a department. Most companies end up paying less than they would have paid, if they were paying salaries to all the employees in a department. It also saves on cost of buying equipment and investing in technology. The outsourcing partner buys equipment and renders services to the business. The money that would have been used to buy equipment is used on other important things that help the firm (Effects np).
Increases efficiency and effectiveness.
Outsourcing helps companies to increase their efficiency because they give a certain task to another entity. When a firm does all its processes in-house there is the risk of inefficiency because employees have many tasks to do. Outsourcing creates specialization and this ensures that specific tasks are done well. It also ensures that everything is done within a specified timeline. Since the outsourced company will receive payment for the job they make sure that all the tasks are perfectly done.
Reduces cost of labor.
Outsourcing ensures that the company does not have large costs of recruitment and training. Training uses up time and energy and companies may have short term projects. In short term projects the company uses up a lot of energy in training staff that will be with the company for a short time (J 2015). Other times the employees do not live up to the expectations of the employer and it is a waste of time and resources. With outsourcing, the company can ensure that it is working with specialized professionals who are well versed in a particular field and the money and time that a firm uses is for good cause.
Lack of expertise in some type of labor.
Sometimes, a small business may lack experts in a certain field like digital marketing technical support, web design and logistics among other technical areas. Outsourcing helps because it provides experts in that area of business and it reduces hiccups. Most tasks are outsourced to people who have specialized in a particular field and this means that all the tasks happen fast and effectively.
Risk Sharing
When a business outsources, it shifts some of its risk to another entity. This shift of responsibilities is important because it helps the outsourced company to plan better. Most outsourced companies have risk mitigating activities and plans.
Conclusion
Since outsourcing has different pros and cons, every business owner must weigh them before contacting a service provider. Another way to know if outsourcing is the way to go is to consider the tasks that one wants to outsource. If the task is very crucial to the business and would better be done by an outside entity then outsourcing is the solution. However most firms that have outsourced do it because it is faster cheaper, more effective, more efficient and convenient. It also reduces the risk by sharing it with the outsourced party.

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