Human Resources Outsourcing

Outsourcing Benefits

• Reduced expenses –
  Outsourcing can reduce the fixed and the recurrent costs. No payments for health insurance, payroll taxes, sometimes even the equipment per employee and general employees' administrative costs.
  
  
• Expert services –
  Access to required skills that match the company needs, outsourcing services usually will bring required experience.
  
  
• Technology availability -
  Access to the most required technology for the company without the whole costs of developing it in-house.
  
  
• Expand to another market –
  It is possible to use outsourcing services as local agent in new markets.
  
  
• Flexibility –
  In many cases that the workload of a company has ups and downs, human resources and machinery/equipment flexibility is necessary. Outsourcing can provide this flexibility when hiring the outsourcing services only when needed.
  
  
• Business focus –
  Outsourcing enables companies to stay focused on their core business services/products.

Outsourcing Disadvantages

• Less control of processes –
  Many times the outsourcing services are a black box which leads to a situation that as a company that provides the complete service/product you do not have control of all parts but you have the responsibility of the complete service/products.
  
  
• Sensitive information can leak outside –
  Outsourcing services is another link in the chain and might be a weak one, not necessarily deliberately.
  
  
• Dependency on outsourcing provider –
  The more functions that outsourcing is doing in your business the bigger dependency you have in the outsourcing provider. This dependency is a risk for your business if for some reason the outsourcing provider will decide to change the rules of the game.
  
  
• Connections with clients might be weakening –
  In case that your customer receives the service from the outsourcing, you lose the intensive direct communication with the customer and this might lead to a decline of commitment level and losing feedback from your clients.
  
  

When to Outsource