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In-House Vs Outsource: Which Option Is The Best For Your Business

A computer keyboard showing the enter key with the word "outsourcing" on it

In-House Vs Outsource: Which Option Is The Best For Your Business

Running a business is not as cut-and-dry as one might think, what with the ever-increasing demands of adopting new technology to thrive and survive in any industry. Business owners face challenging decisions daily, which includes determining the operational strategy to take and hiring the right people to be on your team.

The positive effects of outsourcing continue to influence and transform the dynamics of business processes. From outsourcing customer support to accounting initiatives, sales, product development, inbound and digital marketing efforts, and more, there are many benefits to taking the outsourcing track.

The ultimate question remains, though: which solution is the right one for your business? Is building an in-house team the best way to achieve the results you desire, or will outsourcing help you grow and reach your goals in the long run?

Let us compare each approach’s advantages and disadvantages to better understand when to outsource and when to keep responsibilities to your in-house team.

Keeping It In-House: The Pros And Cons

One of the significant benefits of having an in-house team is that you have a group of employees who are already immersed in the internal processes—89% of companies prefer to keep strategic planning functions in-house, according to statistics by Booth and Partners.

After periods of extensive training, they learn to understand the company strategy from the inside-out. They will be able to tackle challenges and deliver solutions that are in line with your company’s mission, vision, and goals.

This approach also gives you more control over the output quality since everything happens inside the workplace. You can effectively conduct brainstorming sessions, keep track of the workflow, and stay updated regularly on their tasks’ progress.

Building an in-house team, however, requires a massive commitment—and budget—on your part. Hiring an in-house team can be very expensive, depending on your existing resources and how much you can afford. You’ll need to shell out a lot of money if you want to create a specialized team of experts who will work to meet your company’s specific targets and goals.

Another thing to consider is that finding the right people can be very tricky. It can be a struggle to determine the desired skillsets and fill those roles and responsibilities needed for success.

Internalizing mission-critical endeavors—those that give your company a competitive edge and unique selling proposition—is a must for all business owners. Take a look at your business’s core areas and train your in-house team to develop the right mindsets, attitudes, and skills to leverage key resources.

Giving your employees those challenging and rewarding tasks critical to your company’s success is also a great way to preserve company culture. Knowing that they are contributing to the growth of the company inspires employees to go above and beyond and motivates them to continue doing great work.

Marketing team high fiving each other

Outsourcing Business Functions: The Pros And Cons

Outsourcing has been a viable solution for many start-ups because of its proven ability to reduce costs. With the right strategies, you can get the best of both worlds: the right talent at the right price. You can hire contractors or freelancers for short-term projects, generating maximum savings that would have otherwise been spent on training and benefits that come with bringing an employee into the company.

This approach has also grown to leaps and bounds because it allows business owners to expand their search and have greater access to a large talent pool from all over the world. Finding the right team of specialists enables you to move projects forward quickly and efficiently. Since outsourced employees will likely work on a different schedule, you have the power to get more tasks done around the clock.

Delegating responsibilities to experts helps free up more time and allows you to focus on internal initiatives that scale business growth. Third-party providers stay up-to-date on the best practices and latest trends with their scope of work. Their vast experience in dealing with different clients means that they can help you with new and innovative ways of dealing with challenges and provide creative ways to manage and complete tasks.

The word "Co-working" written on paper inserted into a typewriter

Should You Be Outsourcing These Four Areas?

It is difficult to grow a business if it consumes a lot of resources and time. Small businesses and lone rangers have many tasks to perform and must wear many hats. Having so many different job roles, it can be hard to explain what

One of the major drawbacks of outsourcing is you’ll inevitably lose a segment of control. Without a proper plan for consistent communications or keeping in touch with contractors who work in different time zones, it will be especially difficult to track progress and maintain the level of control you desire. The written contracts for outsourced teams must extensively state how communications and directions will be coordinated and managed.

Outsourcing will only be successful if you’re getting the quality you expect. Anything that is less will undoubtedly lead to disappointments and frustrations in the long run. That’s why it is critical to identify and select the right people extensively to outsource to. The expected quality and the objectives and goals of the project should be outlined and discussed upfront.

If not handled properly, outsourcing can harm your company culture as a whole. There is a tendency for in-house employees to get upset or confused because of fears that they may get replaced. Employee productivity may decline and add challenges to the daily workflow. Before outsourcing, ensure that your employees clearly understand who and what might be impacted by the decision.

One essential factor when considering this approach is to outsource tasks and activities that cannot be performed by your in-house employees. Take an in-depth look and think strategically about what your in-house team is not good at, what you need help with, and what you don’t have time for.

Think of outsourcing as a cost-effective way to get experts who can fill those knowledge gaps while you and your in-house team cover and nurture those in your areas of expertise. It’s good to have outsourced contacts you can trust to deal with various issues quickly and competently. This way, you’ll have plenty of opportunities to focus on the core aspects of your business.

Group of people looking at a laptop

Making the Right Choice for Your Business

The decision to outsource or in-house is not always black and white. There are many factors and aspects to consider regarding talent, business needs, and immediate and long-term plans.

Some may even go for a hybrid model—a mix of both approaches—to get higher returns. Typically, this involves outsourcing functions that are less important while keeping in-house those integral to business development and growth. Effectively play out the strengths of both methods to your advantage to create more value without stretching your workforce thin and streamline your business processes.

Meanwhile, the global outsourcing market has doubled in size in the past nine years and is on track to continue this boom. With its ability to adapt to speedy changes in business environments, outsourcing continues to be a tool of choice and an integral component of practices for both start-ups and large companies.

More and more companies are outsourcing to cut costs while improving flexibility and innovation. They are taking the necessary steps to avoid pitfalls and outsource in a smart way, ensuring that all parties are clear on goals, keeping consistent communications, and are tightly managed.

It all boils down to properly identifying and thoroughly understanding your business needs. Carry out a cost-benefit analysis to give you a clearer picture of how hiring an in-house team or outsourcing will be more beneficial in the long run. Make an educated decision by putting your business model and objective front and center. Ultimately, your current requirements and goals will help you determine the next steps to maximize your business growth.

About The Author
Jamie co-founded optiBPO in 2008 and has over 25 years of experience in organisational transformation, shared services, and outsourcing. He has worked with over 100 companies in the past 5 years to offshore a range of business operations to the Philippines. Jamie has a strong track record of building high-performing outsourced teams.
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