Outsourcing. It’s more than just a buzzword, and more than a trend, but it has to be treated with common sense and pragmatism. If it makes business harder, it isn’t working.
You probably know already that EnCoCreative is big on outsourcing. That’s because our entire staff is outsourced. It is literally our business model. Specialists working out of their own homes and their own countries, brought together to make something great. That’s the idea, anyway, and so far it’s working for us and our clients.
We’ve put together a few thoughts on why outsourcing isn’t always the right thing for a business, because we know that different ways of working sometimes look more attractive than they really are.
Open-minded business people are always prepared to change the way they work to improve their business, but it isn’t always prudent to do so.
Cost isn’t only money
Outsourcing can be costly. Your business may pay out smaller amounts per hour to contracted workers than it would to in-house salaries, but there can be hidden and unexpected costs that need to be taken into account.
For example, miscommunication can be an expensive business, especially when it involves remote staff. In-house staff have the luxury of being able to catch up quickly with the manager who commissioned the job and double-check the issues. But when miscommunication between managers and outsourced workers takes place, it can take longer to sort out resulting in greater costs, missed deadlines, and work that has to be redone.
You might also find that although your outsourced workers come with great reputations, this is partly because they do so much work. Time is money and they will prioritise your work in competition with their other clients. Have you got time for that? Can they still produce amazing work for you in the time you need?
Relationships are also important when working closely with people. If you feel a little peripheral to your outsourcers, or if you feel that you are peripheral to them, it can have quite a profound effect on your relationship with them, and more importantly on the work they do for you. A worker who dislikes their client or manager is unlikely to produce the best work they can. Similarly, if they don’t ever have any contact with you, they may care less about your work than they might if they saw you regularly. Outsourcers – companies and freelancers – often work on several projects for several clients in the same time frame, and priorities can be changed according to who they prefer to work with, and which work they prefer to do.
It can be tricky to produce the close working relationships you need with outsourcers, especially as sometimes there can be a middle man when dealing with outsource companies. If you are a great communicator, this issue can be mitigated to an extent, but much depends on the personalities of the people involved and whether or not you get to communicate directly, or through a middle man when dealing with an outsource company.
Quality can only be planned so far
When you employ someone in-house through a proven robust recruiting process you can usually feel relatively sure that you have chosen the right person. Employment processes such as appraisals and monthly ‘supervision’ sessions ensure that you can keep a close eye on the person’s work in a way that helps you both.
For individuals, the selection process can be faster than in-house recruitment, but not as robust. If you are outsourcing entire departments, the tender process should ensure robustness, but it shouldn’t be assumed that it does. Test it. Check it.
Processes and systems are all important when it comes to outsourcing. Without the right systems in place, it can be very hard to monitor progress, efficiency, and effectiveness; all essential monitoring tools when judging the quality of the outsourcing. If your business doesn’t have set processes for the areas you plan to outsource, you’re really not ready to do it yet.
Your processes will keep the wolf from your door as much as possible, but they may still not help you when it comes to loss of reputation. When you subcontract work, you become liable for any let-down that occurs, however genuine the reason. Whether your contractors are a company or people, liability has to be written into their contract, but here’s the bad news: even if you get to blame the contractors, you’ll probably still get the blame from your clients.
How do you make outsourcing work?
The success of outsourcing is very much reliant on the right type of work being outsourced. Why you need to outsource. If there’s no need, you shouldn’t do it.
If you want to outsource a whole department, it shouldn’t be core work. For example, if you make your money through fabulous sign designs, your designers should probably remain in-house so that you can maintain control, and surety. Your IT department, or your business admin, however, could be outsourced. Good support is crucial to business, and if the outsource company is well-organised, the arrangement can work well.
On the other hand, sometimes you need a specialist in one of your core areas; if you don’t always need them, or if you aren’t certain that you are going to need them often enough, outsourcing on an individual and job-by-job basis could be right for you. It’s your call as to why you need to outsource, but the key factors to consider should always be cost, and need.
Clear direction of travel
Outsourcing only works if you know where you’re going. If you find yourself outsourcing on-the-fly, the chances are that it’s going to be a costly effort. When you plan the immediate and mid-term future of your business – say if you are reorganising or restructuring your business – outsourcing should be included within the options, not pounced upon at a later stage as a panacea for any problems. During reorganisation is often the best time to look at outsourcing as a viable option because it will probably be clearer. Don’t get us wrong, disaster can happen to anyone; you may find your project or company develops a need for outsourced skills at a late stage, but in the main, including it as a viable option in areas of non-core business when planning the next stages can only be a good idea.
Rein in your expectations
It’s not that you shouldn’t expect high standards – of course you should. But keep your expectations under control. Outsourcing a job that you’ve found very hard to maintain in-house doesn’t mean that all your problems will be solved. Some will only just have begun. Outsourcing is a solution, not a catch-all; it has to solve more problems than it creates, but it will usually create some problems. Weigh up the options and remember that outsourcing won’t save your business from catastrophe. Control your expectations.
Give communication a clear route
Communication matters, regardless of whether your staff is in-house, outsourced, or split between the two. Whether you’re using individuals or whole companies, it should be clear, concise, and culture-proof.
The issues around different cultures come into play when you’re dealing with internationals, although clearly cultural differences can come into play if you live in a multicultural society.
Your customer service team in India may be dedicated and reliable, but if they don’t understand your Western customers’ complaints in the context of those customers’ lives, there may be issues.
The same can occur when giving instructions, to individual freelancers or entire companies. Some cultures measure time or quality of work differently.
People use language differently, so although everyone may be talking English, the way in which they utilise the language may not be the same. Language can be used in a very passive, non-confrontational way, or in a more forceful manner, and its usage is often linked to culture.
For example, Westerners may be comfortable with the word ‘no’. However some cultures – particularly in the East – may prefer to say ‘I will see what I can do’ or ‘I will look into that’, when they really mean ‘no’. No is not a polite word for some, and can be considered disrespectful. The communication channels have to be clear. Otherwise there is a risk that certain situations, which you thought were clearly dealt with, can go wrong.
To outsource or not to outsource …?
Only you and your team can put the information together to inform yourselves as to whether or not you should outsource. But if you take these issues and think around them creatively, the answers should become clear.
And now, just because we’re nosy and we like to know what other people are doing: what’s the weirdest job you ever outsourced, and how did the experience go?