According to Wikipedia: ” Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity that is or could be done internally.”
In other words, outsourcing arises when a business hires an outside team\independent specialist to provide goods and services, rather than doing the work in-house. For example, a Digital company from the USA wanted to have additional income and do websites for their clients for future promotion inside their company.
The digital company has 2 ways:
- Organize an in-house web development department.
- Find a web development team outside their company. That means that they will take web development services from other companies.
Outsourcing practise started to be popular in 1990s and continue growing.
The most popular directions for outsourcing:
- Software development
- Web development
- Mobile development
- Content writing
- HR management
10 reasons why do companies outsource?
1) Don’t have time to build an in-house team
Hiring process often takes a lot of time. After you hire employees you should build processes inside the department which will be connected to the general process in the company.
All these require a lot of time.
2) High taxes that companies pay for their employees in developed countries
In developed countries, employees are very much protected by the government. Usually that require additional budget from the business owner
3) Lower cost.
Outsource gives the opportunity to people from developed countries hire people from developing countries. Often that helps them to reduce the cost of work
4) Don’t have time for in-house team management
By delegating tasks which are not related to your business you will be able to focus, just on the specific to for your business tasks. This is the way to work not hard, but smart.
5) You pay for what is done. No need to pay the salary which is often not connected to the resulting work
When outsourcing you don’t pay for vacations, holidays, employe’s education, snacks in the offices etc… you just pay tasks which were done.
How does outsourcing work?
Depending on where you plan to find a supplier you can use marketplaces like Upwork or listing websites like Goodfirms
A marketplace is a good solution if you want to find someone for small tasks. Very often Marketplaces are popular with students or people who have a full-time job and want to have an additional income.
Listing websites like Goodfirms are more popular with professional companies who are working more than 5 years in the industry.