Outsourcing Your Labour Or Do You Recruit?

Outsourcing your labour can be an expensive exercise so it is important that you know upfront what your benefits are. Most organizations will outsource labour as a means to bypass certain responsibilities or because of a lack of recruitment skills.

Outsourcing labour can be beneficial if it is done for the right reasons. In this article, we will look at valid reasons for outsourcing and the benefits you can harvest from it if done correctly.

• What is outsourced labour?
• Is outsourcing labour good or bad?
• Do you outsource labour or recruit?
• What are the benefits of outsourcing labour?
• What are the reasons for outsourcing?
• When must you avoid outsourcing your labour?
• The future of outsourcing
• Outsourcing your labour or do you recruit - Conclusion

What is outsourced labour?

Outsourcing labour is when you have specified or identified certain functions within the organization that does not require full-time resources. These resources are then located via labour supply companies that specialize in the temporary placement of qualified staff.

These days more and more people are offering their expertise as freelancers so it is becoming easier for companies to negotiate with individuals directly. Temporary contracts with freelancers are how most companies deal with outsourced labour.

Is outsourcing labour good or bad?

As with anything else in life you will always have two viewpoints with pros and cons that can be discussed at length but it all comes down to if the reasons for outsourcing are honest and handled in the correct manner.

Outsourcing labour is intended to give your organization a competitive edge over competitors by sourcing specialized services and skills that others don't have. 

It is also supposed to lower costs and boost profit which can be filtered to consumers but we all know that does not happen

The bad side of it is more clear-cut as most of the long-standing institutions that create organizational culture become non-existent. Loyalty, commitment, and teamwork cannot be nurtured like before.

In some instances, it can also create social-economic problems where large geographical areas are affected. Locals losing jobs to non-residents can have a long-term effect on both your company and the society it is supposed to serve.

Do you outsource labour or recruit?

If you are going to recruit your own staff or if you are going to outsource will entirely depend on your needs. Outsourcing labour is a thought process that will require thorough planning and input from multiple parties.

This is because an impact assessment needs to be done in order to establish how this will affect the vision and goals of your company. In some cases, outsourcing labour will affect your staff and their job security which can put you in a bad light if caring for people in your business.

A decision must be made based on the reasons why you need the resources and why it will not be economically viable to recruit your own staff. By now you should be able to know how it will impact your team dynamics within the company.

What are the benefits of outsourcing labour?

If applied correctly, outsourcing of labour can be very beneficial for the business. Although outsourcing comes with a bundle of problems it does also come with some valid benefits.

Most of these benefits are of monetary value and therefore a good motivator to overlook some of the negative effects they might have on your business.

• You can increase team efficiency where skills are lacking
• Lower tax payment if labour is outsourced to other countries
• Business focus can be concentrated on what is important
• You can limit your staff base
• Cost savings obtained by cutting overhead costs
• Training costs are reduced as skills can be recruited when required
• Projects and tasks outsourced can be done quickly because of a dedicated team

With proper planning and identification of real needs, you will be able to extract many more benefits from outsourcing your labour complement.

What are the reasons for outsourcing?

This will depend on your reasons for the need to outsource your labour or specific functions.

 
Mostly your need for outsourcing can be based on one or more of the following reasons:

• Lack of specific skills in the labour market
• Restricted recruitment resources internally
• Temporary demand increases
• New ventures
• Short-term projects
• To be more flexible with your options in the marketplace
• To make better use of internal resources under strain
• Difficult to-manage functions can be outsourced to specialists
• To test expansion into new markets without upsetting the status quo

These are all valid and appropriate reasons for considering outsourcing labour. The high unemployment rate ensures a wide variety of skilled labour that can boost productivity under these conditions.

8 Reasons not to outsource jobs

There are certain situations you can find yourself in and you feel that your only option is to outsource your labour or task. This decision must be well balanced with the pros and cons already discussed but there are certain times you will have to avoid getting into outsourcing specific jobs.

• When management does not have the skills to manage outsourced labour
• When the organization does it in order to obtain cheap labour
• For unethical reasons such as avoiding the responsibility of employee welfare and moral support
• When the need to communicate long-term goals is not considered to be necessary
• Avoiding training responsibilities
• When confidentiality comes into play. Remember outsourced labour has no loyalty
• If it is a long-term project that needs constant focus and further development
• When it can harm organizational culture or team efficiencies

Under these conditions, you will find that productivity becomes short-term and motivated employees far and few in between.

Being dishonest in your intentions will catch up sooner or later and normally at a great cost to the organization.

The future of outsourced labour

Fortunately, times have changed and not everybody looks at outsourced labour in the same way anymore. Of course, the curse of labour brokers is still there but things are changing.

Today we are looking at a new breed of outsourced labour coming to the fore and they are highly skilled. Unfortunately for the employer it also comes at a higher cost but by this stage, they realize that certain skills are too expensive to take on a permanent basis.

Unskilled labour will always be at the top of the pile when it comes to labour exploitation and the current unemployment rates make it much easier to outsource without taking any responsibility.

Outsourcing your labour or recruit - Conclusion

Outsourcing your labour can provide you with huge benefits but only if it is planned well, done with positive intention, and managed properly.

The market is providing us more and more with highly skilled professionals who endorse the role of an outsourced employee. These professionals can help grow your company and supply the innovation needed to survive in the long term.