Outsourcing: Efficiency and Costs

Deliberating Efficiency and Costs of Outsourcing

 There is a heated argument between outsourcing and in-house business processing.  Many are debating whether employees working hundreds of miles away deliver the same performance as those who are just in the other room.  Or if the benefits of setting up shop abroad really outweigh the drawbacks.  Looking at the current trend, it is obvious what the answers are to these questions or more importantly, which side of the debating table is winning.

However, how do you properly gauge efficiency? Anyone who does his job within the required parameters is considered efficient.  To be more specific, an individual who completes his tasks or hits his targets within a specified timeframe is an efficient employee.  This same principle is what motivates companies to bring their processes elsewhere.  Having effective and efficient employees is what companies strive for.  But having more than twice the number of employees for the same cost is even better.

Traditional employers believe in the importance of having face-time with employees.  While it is an important factor in building a good office environment, most businesses realize that it is a small price to pay considering the advantages that outsourcing provides.  Moreover, with today’s technology, people can get as much “face-time” as they need without physically being in the same place.  It is possible to keep tabs (perhaps a little too much in some cases) on people regardless of location.

The Benefits of Leasing or Outsourcing

Salary, Health Benefits and Insurance – The BPO firm will take care of these things.  All the client has to worry about is the details of the work needed and of course, the agreed operation costs.

Taxes – Again, is shouldered by the BPO firm as well.

Employee leaves and Holidays – Outsourced or not, employees need their rest.  The overall cost of production will be dependent on the client’s needs.  However, employee relations will be handled by the BPO firm since it is also a company by itself.

Hiring and Training – Likewise, the hiring process and the training will be handled by the BPO firm as well.  Clients can add certain requirements on what to look for but in many cases, The BPO’s own set of requirements is more than adequate for most companies already.

Office space and Equipment – New employees will need a place to work and with the cost of office space alone reaching almost unreasonable levels, BPOs are a far better option.  It is quite literally, hiring employees, office and all, for a fraction of the cost of actually building one.

With these benefits, it is easy to see why many companies outsource their business processes somewhere else.  This helps a lot in the company’s growth by lowering operating costs and increasing productivity at the same time.