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Outsourcing doesn’t have to equal Layoffs
 
 

Believe it or not . . . sometimes it makes sense to outsource your operations within the US and NOT overseas. And, there are also times when it makes sense to utilize outsourcing to compliment your current process that's already in place.

So, what I'm trying to say is -- Outsourcing doesn't always mean that US jobs will be lost.

There are times where it makes sense either financially or strategically to outsource operations within the US. There may be additional costs associated with outsourcing your project overseas that could inflate your expenses. For example, one outsourcing analysis had shown that the telecommunications and software license costs were not included in the initial proposal from the foreign outsourcing provider.

It turns out that after these costs were taken into consideration . . . hiring a domestic outsourcing provider was actually less expensive.

In another example, an organization wanted to know how much of its IT department's time was spent on repetitive tasks. Instead of hiring an additional team in house, the client opted to outsource this project overseas. They were able to find lower skilled workers that could perform these "cookie cutter" tasks at a low cost.

This did two things:

1- It enabled the IT workers at US headquarters to focus on more new projects

2- It increased their overall productivity.

The best part of this particular outsourcing initiative was that no jobs were cut and the company ended up getting more for its payroll dollars. While downsizing the workforce is often a goal in outsourcing, it is not always required.

All or Nothing?

Many outsourcing companies will pitch an all or nothing approach to outsourcing your needs. You should keep an open mind about taking a multi-phased approach. It's better to start small and test the waters first.

You may consider outsourcing some smaller projects or non-core competencies and see how your outsourcing partner performs. You can still gain some immediate advantages by starting small and you'll also reduce your risks too!

Some of the most successful outsourcing strategies involve keeping the highly skilled, specialized functions in-house and farming out the smaller, routine processes. Not only can this strategy save time and money, but as mentioned earlier, it can free up your skilled internal positions to work on more pressing initiatives.