Some Advantages of Outsourcing
Lower employee costs
Manpower is likely the most important resource in any company, and it generally comes at a high cost as well as challenges. For this reason, small and large companies undertake outsourcing services to The Philippines and other countries. Professionals in outsourcing destinations such as The Philippines can be hired at a fraction of the cost for similar professionals here in the US. Often, these workers are not unionized as well, which further lowers manpower costs.
Outsourcing enables companies to cut operating costs
Even though outsourcing services are paid for, often the cost of an outsourcing service in an offshore location is cheaper than if the company performs the operation itself. Lower salaries are a part of this benefit, but there are other cost-saving advantages as well. For instance, each employee that does not work “on site” means one less computer, and no extra maintenance costs. In addition, employers can offer medical coverage to outsourced employees at a fraction of the cost for similar coverage here in the US.
There are other areas that offer savings as well. For instance, training costs can be prohibitive in a any kind of company. This is especially the case in high turnover jobs such as customer service call centers. Each new employee may need one to three weeks (or more) of training before being able to start working. In addition, there are materials to create and trainers to hire. By outsourcing services to The Philippines and other outsourcing destinations, a company can cover these training costs at a fraction of the cost of hiring and training an employee in the US.
Increase in productivity
Theoretically, a company can have employees working on site 24 hours a day. However, it is harder to attract talented employees to work less desirable shifts. Outsourcing is a very useful intervention that enables companies’ employees to work round the clock without adding to employee turnover and loss of productivity. Time-zone differences allows businesses to take advantage of outsourcing services to cover the 24-hour cycle as well as to be more productive to their own clients.