TOP 10 FALSE MYTHS ABOUT OUTSOURCING THAT YOU SHOULD DEBUNK TODAY

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1. OUTSOURCING IS EXPENSIVE

According to Throgmorton.co.uk  “All businesses will naturally incur a certain amount of overhead costs to meet statutory demands (for example legal, tax, HR, health & safety, payroll, and bookkeeping expenses), and this is one area where an outsourced solution is often cost-effective.”

Outsourcing  delivers significant cost savings in comparison to the cost of in-house services as explained below:

1. It converts fixed costs into variable costs and releases capital for investment allowing businesses to cut back large expenses during the early stages of their evolution and put more capital into revenue-producing activities.
2. Outsourcing services ensure benefits from its processes and the economies of scale.
3. It helps bring about lower cost of labour through any or all of the following means
   • Lower direct salary costs may result if the provider operates from a lower-cost location.
   • Savings can be made, for instance, by reducing exposure to changing employment law, saving on recruitment costs, reducing HR and payroll administration costs, and lower occupancy costs resulting from a smaller headcount.
4. Through an outsourcing company, you get access to many different people with different skill sets and with different levels of experience. Thus, an appropriate level of resource can be allocated to a particular task at the appropriate cost.

 All businesses will naturally incur a certain amount of overhead costs to meet statutory demands (for example legal, tax, HR, health & safety, payroll, and bookkeeping expenses), and this is one area where an outsourced solution is often cost-effective.

Throgmorton.co.uk 

2. OUTSOURCING WEAKENS THE ECONOMIC STRENGTH OF A COUNTRY

This is an utter fallacy! In fact, over the years, the practice of outsourcing is seen more as a growth strategy, which indirectly strengthens the economy. By outsourcing non-core functions companies are able to focus on core activities, thereby increasing productivity. Companies are able to provide better goods and services which leads to consumer satisfaction, high ROIs and job creation. All these explicitly describes a healthy economy.

3. OUTSOURCING MEANS OFFSHORING

Outsourcing and offshoring are not exactly the same. Outsourcing is a business practice of engaging a third party to perform certain services or job functions, mostly in the country . However, offshoring or offshore outsourcing simply involves engaging a third party from another country to carry out certain functions or services on a contract basis.

4. OUTSOURCING ALTERS ORGANIZATIONAL STRUCTURE

This is far from the truth because outsourcing supports company structure and culture. It provides companies with several options to spread their tentacles, share risks, and achieve goals and objectives. At Phillips, we understand that organizations have different cultures and structures and we build these into our sourcing processes and induction/onboarding programs ensuring that staff that we deploy to our client organisations are best fit.. This distinct attribute has made us preferred partners over the years.

5. OUTSOURCING IS LIMITED TO ONLY LARGE AND ESTABLISHED BUSINESSES

Although, outsourcing tends to attract big business players because they understand the importance and benefits of outsourcing, all organisations, irrespective of size, can infact use and enjoy the benefits of outsourcing. Infact, SMEs can leverage outsourcing services to proffer solutions to the start up challenges of growth, sustainability, brand identity, customer loyalty, mismanagement Are you an SME owner? Don’t hesitate to reach out to us.

6. OUTSOURCING COMPROMISES CYBERSECURITY

One of the major concerns of companies is cybersecurity. Businesses face breach of privacy and data compromise. While it is understandable that this myth may have arisen due to experiences, it is not appropriate to make it generic. Outsourcing companies like Phillips understand the importance of cybersecurity and data protection because private information is being shared. We have trusted methodologies and the technology that protects client’s information and data. Integrity is our core value and we comply to policies with respect to data protections.

7. OUTSOURCING LEADS TO UNEMPLOYMENT

Contrary to this myth, outsourcing has contributed immensely to considerable rise in job creation. Outsourcing helps companies to cut costs, expand their capacities, and create job opportunities as a result.

8. OUTSOURCING PRODUCES LOW QUALITY DELIVERABLES

Companies outsource to competent vendors because they want high-quality products and services. Due to up-to-date expertise, manpower and technology, outsourcing firms like Phillips Outsourcing have a proven track record of good quality deliverables. So, you can be sure to bank on us.

9. OUTSOURCING DEPRIVES CONTROL OF BUSINESS

This is yet another misconception. The goal of outsourcing is to delegate non-core activities to a third party. These activities are not core-functions so they don’t have a significant control over the company. Since your company still retains control over the core activities, you entirely are in charge of your business.

10.  IN-HOUSE DEPARTMENT IS MORE COST EFFECTIVE THAN OUTSOURCING

This is a myth in which many businesses fall prey to. Creating in-house teams by recruiting people to handle functions is more expensive than outsourcing those functions. Take into consideration, the cost of recruitment, the cost of training, cost of payrolling, the risks involved whether or not these employees will be productive and deliver quality products. All these expenses can be cut and risk properly managed by outsourcing.