| Outsourcing is an established way of doing business | | | | plan, staff members to oversee contracts or a |
| today, allowing companies to maximize their budgets | | | | philosophy that supports the outsourcing initiative? If it |
| and resources - and generate better products. | | | | does, outsourcing may be ideal for your business. The |
| Also referred to as subcontracting, outsourcing simply | | | | bottom line is every business is different and |
| means acquiring a product or service rather than | | | | companies should carefully weigh the benefits of |
| producing it in-house. Outsourcing is suitable for just | | | | outsourcing. |
| about any industry. In the administrative field, for | | | | Benefits of Outsourcing |
| instance, a variety of activities can easily be farmed | | | | Many companies that choose to outsource do so |
| out to a subcontractor, including word processing, data | | | | because they don't have or can't attract the people |
| entry, transcribing, research, contact management and | | | | skills they need. Subcontracting gives them access to |
| event planning. | | | | a much greater pool of resources. It also enables |
| Outsourcing is extremely common practice within | | | | companies to cut cost by 10 to 30 percent, depending |
| human resource (HR) departments. In fact, two-thirds | | | | on the industry. They can purchase services on an |
| of HR departments outsource at least one activity, | | | | as-needed basis, instead of maintaining a full-time |
| according to research by the Bureau of National | | | | employee. This allows them to avoid paying |
| Affairs, Inc. and the Society for Human Resource | | | | employee-related expenses such as salaries, |
| Management. The top five outsourced HR activities | | | | unemployment taxes, paid vacation and sick leave, |
| are employee assistance/counseling, flexible spending | | | | insurance - which results in a lower overhead. |
| account administration, pre-retirement counseling, | | | | In another aspect, outsourcing can help a company |
| outplacement services and pension/retirement plan | | | | focus on its core business, creating a competitive |
| administration. | | | | advantage within its industry. Subcontracting also |
| Weighing the Outsourcing Option | | | | affords the business the chance to get the best job |
| When deciding whether outsourcing is a viable option, | | | | possible from the people it hires. By using a third party |
| a company should consider all of the issues involved. | | | | supplier, a company has more room to be critical of |
| Should the projects be kept in-house because they're | | | | the kind of services provided. If the work is done |
| critical and employees need to know how to do them | | | | in-house, company ties may interfere with the final |
| themselves? Also, does the company have a sourcing | | | | product. |