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8 Things To Love & Hate About Outsourcing Employees

  Mark Hall        2011-11-12 10:16:13       2,667        0    

What is the dirtiest word in business? Chances are that the word ‘outsourcing’ comes to mind. Many Americans despise it, many business owners shy away from it and many entrepreneurs depend on it. Regardless of what side of the issue you are on, it is important to know that it exists and will continue to exist. Why? Because there are a lot of things to love about outsourcing.

As a business owner and tech entrepreneur who exists in a hyper-competitive market, I have used outsourcing to accomplish a variety of tasks. Whether it is data entry, design, research or basic programming, there is a market of willing outsourced employees available to you. Leveraging the talents of others who may live beyond our borders provides a number of great advantages. However, on the other hand, there are many drawbacks that accompany outsourcing.

Here are 8 things that I love and hate about outsourcing:

Love

1. Reduced Costs

The single-most influencing factor on why entrepreneurs consider outsourcing as an option is the reduced costs of using foreign labor. Often cheaper than using American talent, outsourcing allows entrepreneurs and project managers to utilize contractual employees as opposed to having part-time or full-time employees within your office.

2. Time Zone Factor & Holiday Schedule

Imagine having your employees working while you are sleeping. Based on the countries where the majority of outsourcing occurs, it is likely that your outsourced helper or employee will be on the opposite side of the world. While your office is closed, your company can still be open. Support staff, data entry, web development, can all be accomplished through outsourcing. Also, because large portions of the outsourcing staff may not recognize American holidays, your company doesn’t have to close its doors on 4th of July, Christmas, Easter and other big national holidays.

3. Easy to Post & Manage Projects

When you use a service like VWorker, Odesk, Freelancer, or any other similar service, it organizes and streamlines the management of outsourced employees. It is extremely easy to post a project and get someone working on it very quickly. If you need things done quickly, there are massive audiences of people who are eager to work on a moments’ notice. The management process of deliverables, project cancellations, or payments schedules is extremely easy with these tools.

4. Distant Relationship = Easier to Fire or Replace

Face it, when you work with employees, things don’t always go as planned. Having a contractual relationship through outsourcing provides you the ability to replace or fire an employee without the traditional baggage of relocating, family, etc. With outsourcing, personal feelings don’t get in the way because that bond is less developed and distant. As it can also be great to build strong relationships with each of your team members, it is also valuable to be able to release those who are not performing, on the fly.

 

Hate

5. Frequent delays in deliverables (aka the 4x rule of time)

The one thing that you will quickly learn when working with outsourced developers is what I (and many others) refer to as the ‘4x Rule’. This rule, which seems to inevitably apply to all projects and most employees, refers to the fact that it will take four times as long to complete the project, assignment or duty than what you estimate or are quoted. This occurs for a variety of factors including communication lag or miscommunication, inaccuracies in project implementation, in addition to normal project delays. As something that can become very frustrating, this is a negative factor of outsourcing that is difficult to avoid.

6. Intellectual Property & Privacy concerns

Within the United States, we have laws, rules and regulations. When you employ outside of those physical borders, as you do when you outsource to foreign labor, you often are forced to worry about the critical issues of intellectual property (IP) and privacy. As a web technology and software guy, I find this specific point to be the most troubling. IP is not something that can be closely protected when an employee resides in a country that doesn’t abide by American laws. For example, let’s say that you are building a software company and you have not yet launched. Part of your software is being developed by a team in India where you are paying 1/6 of what you would normally pay. However, as your project continues and your product looks better defined, one of your outsourced programmers goes rogue and steals your code. How do you take legal action? As there are tools that are available that minimize your risk exposure, the basic premise of this example becomes a very complicated matter that can be avoided by not outsourcing.

7. Lack of focus on your project

As a project manager or business owner, one of the biggest concerns that you may encounter is ensuring that your programmer or developer may not be focusing on your project as much as they should be. Because the employee may be contracted as a part-time worker, you can only hope that your project is at the top of their priority list. This means that the employee is not worried about other clients and other projects. When you have employees in-house, under one roof, you can monitor this and minimize the distractions. When the employer is working remotely, it becomes very difficult to keep them focused or prevent them from working on projects for other clients on your dime.

8. Personal Conflict

You may or may not share my final concern about outsourcing, as it may be simply be a personal conflict of mine. At a time when high unemployment rates plague the U.S., you are potentially preventing another American from getting work by giving new projects to a foreigner. As much as this honestly hurts me anytime I utilize outsourcing, I also understand that entrepreneurs are forced to consider how to minimize expenses when building a business. This is an issue that I know many other entrepreneurs have dealt with and may affect them when considering using outsourcing in the future.

Closing Thoughts

So there it is. Did I miss something? If you have outsourced any projects and have had positive or negative experiences, share them with us in the comment section. Did you find the perfect employee? Did you work with the designer from hell? What was your best experience with them? If you are yet to try outsourcing for a project, I suggest testing it out and seeing if your business or project could benefit from it. Let me know how it goes.

Source:http://mytwoandahalfcents.com/?p=733

EMPLOYEE  DISADVANTAGE  OUTSOURCING  MERITS 

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