Economic Benefits of Outsourcing
Outsourcing continues to grow across all industries and enterprises due to its many benefits. At the onset, reducing costs was a major factor that drove companies to outsource some of their operations. In recent years, that drive has expanded to include the search for hard-to-find skills in specific locations.
Usually, the functions that are outsourced are considered non-core such as finance, accounting, human resources, customer service, engineering, business development, and digital marketing. This enables companies to focus on their core business activities.
No Additional Staff and Training Costs
According to a Forbes report, an acute skills shortage specifically in information technology wracks up about £63 billion annually in opportunity losses for the U.K. economy due to 600,000 unfilled tech jobs. Cases such as these are driving businesses to rely on outsourcing partners in Asia to fill those costly IT talent gaps, whether they are in support functions or in areas that involve new technologies such as data analytics or machine learning.
Searching for professionals with highly specific skills costs a considerable amount of time and money, not to mention the cost of training new employees for their roles, social insurance and other benefits, and tax issues.
With the expected increase in staff salaries in the Asia Pacific due to the growing complexity of skills and the type of work, outsourcing specialized skills takes these costs off a company’s plate and puts it on the service provider’s.
No Software or Hardware Costs
Another important consideration to outsourcing is the high cost of investment in software and hardware. Maintenance fees are incurred to keep the applications and equipment updated. Hardware expenses in particular involves electricity costs.
Outsourcing companies can help defray the cost of expensive software and hardware by sharing these expenses among all of its customers. Moreover, choosing a specialist service provider gives a company access to the modern technologies.
Independence from Labor Obligations
Human resources requirements often need to comply with legal regulations in various countries. Outsourcing frees up enterprises from these legal obligations because the employees are the responsibility of the service provider who must meet overtime holiday pay, settlements, and other government-mandated requirements.
In challenging economic times, a company that outsources some of its work is not subject to reduce employee count, pay settlements or collective agreements. Outsourcing allows the company to pay only for the work that was successfully delivered.
Establishing a fixed price per task completed makes the maximum cost transparent and measurable. It is helpful to check out cost comparisons of similar tasks such as accounting, human resource or software development in various countries.
Companies that outsource could also enjoy tax advantages, which varies depending on the country they outsource to. For example, in the Philippines, “existing government programs include incentives such as tax holidays, tax exemptions, and simplified export and import procedures” to encourage more investments, according to the ASEAN Briefing. These tax incentives include temporary reductions or eliminations of corporate taxes, the report added.
Find an Outsourcing Expert
In all, outsourcing can be a beneficial step for any company, with about 78% feeling that this step give them a competitive advantage, explains Customer THINK.
Now that you understand the many benefits of outsourcing, it is time to contact an expert outsourcing company that will address your requirements.
Contact us today and let us help you grow your business.