What is Outsourcing
What is Outsourcing
So, what is outsourcing? Outsourcing is contracting with another company or person to do a particular function. Almost every organization outsources in some way. Typically, the function being outsourced is considered non-core to the business. The outside firms that are providing the outsourcing services are third-party providers, or as they are more commonly called, service providers.
Although outsourcing has been around as long as work specialization has existed, in recent history, companies began employing the outsourcing model to carry out narrow functions, such as payroll, billing and data entry. Those processes could be done more efficiently, and therefore more cost-effectively, by other companies with specialized tools and facilities and specially trained personnel.Currently, outsourcing takes many forms. Some organizations outsource whole operations.
Why Outsource
Companies outsource for many reasons, the most prominant in our region are:
- Short and medium term contracts to cover seasonal fluctuations in output and productivity, or personnel shortages can be arranged flexibly avoiding the need for the client to commit to long-term contracts.
- Highly specialized professionals for one-off projects can be hired for fixed term contracts.
- Changeover of temporary and permanent staff is more time efficient and cost effective.
- Outsourced candidates are able to work for longer trial periods than current legislation for permanent staff permits.
- Increase manpower without an increase to head-count.
- Greater flexibility and control over remuneration.
- Provides the opportunity to terminate poor performers and reward the good ones.