Outsourcing: Domestic Verses International
by Carrie Hinkel on October 12th, 2007
As e-commerce and home-based businesses continue to flourish, more and more companies are turning to outsourcing to reduce costs and make certain aspects of their businesses simpler. Outsourcing, either domestically or internationally, is the subcontracting of work to another company.
There are a variety of services that can be outsourced to another company, such as:
*Warehousing and fulfillment services
*Order taking and customer service
*Data entry
*Website design and management
*Payroll and accounting
In general, the benefits of outsourcing certain services can be great:
*Save on training costs
*Reduce overhead costs
*Gain access to specialized skills
*Eliminate staffing problems during peak periods
*Stay at the forefront of technology
The benefits of foreign outsourcing:
Cheaper labor: There is no doubt that in developing countries, the labor rate is much cheaper than in the U.S. For example, where a typical hourly rate for a talented web designer in the U.S. is around $50, in India you will be able to find plenty of skilled designers for $10 an hour or less. For non-skilled jobs like data entry and order taking, the rate is far less than the minimum wage in the U.S.
Availability of competent and reliable workers: many times, companies have a difficult time finding hard-working, responsible local workers to fill their jobs. Rather than continually hire new workers (low wage workers aren’t the most reliable, steady workers in the U.S.) companies are finding it easier to hire a foreign outsourcing company with a large supply of workers to handle certain jobs.
The benefits of domestic outsourcing:
Minimal conversational differences: A common complaint from customers dealing with companies’ offshore customer service is not being able to fully understand the foreign representative. Whether it’s a foreign dialect or unfamiliar phrases, customers are becoming more frustrated with the outsourcing of customer service and order-taking jobs to overseas companies. An increasing number of companies are receiving complaints and many are rethinking their foreign outsourcing of that particular sector.
Contributing to the U.S. economy: It may not mean much to large companies focused on the bottom dollar, but many smaller businesses are making an effort to keep their outsourced jobs headquartered in America. Domestic outsourcing companies are typically minimum wage jobs, but for many unskilled workers they are a good opportunity to make a living. Having these jobs available in the U.S. and not sending them overseas helps keeps more money in the U.S. and keep the dollar strong.
Outsourcing can be a great way to eliminate costs and free up much-needed time from management. To get started, it is best to select several companies who specialize in the outsourcing services you desire and then rate their differences and check their references. Finding a reliable company to work with should be fairly simple, as many have been successful in business for many years. Outsourcing companies are in charge of the training and hiring of employees, as well as having the latest in technological equipment on-hand-and all of that lowers your overhead, investment and capital costs.