What are the Pros and Cons of Outsourcing?

There are both pros and cons to outsourcing, all which must be considered before reaching a decision. And Outsourcing has become a big deal in our economy. I just did a Google search on “outsourcing” and got 1,130,000 links. You can find a lot of opinions on how to do it right or screw it up! One popular way is to focus your company on your core competency, and let someone else do the rest. The key is to understand your business and its goals and decide how outsourcing might help you attain them.

There are some crucial aspects of your business you should probably not outsource. You need to keep an eye (your eye!) on them at all times. These include cash-flow management and, in many cases, customer interaction.

Some tasks make sense to outsource initially and bring in-house later. You could turn to a temporary agency to hire one for you. If you aren’t very experienced at hiring a receptionist.

While the above scenario is common, you don’t have to consider outsourcing until you have enough work for an employee. One advantage of outsourcing is flexibility–it can be a lot easier to cut back on a vendor than an employee. Think of how you would feel if you had to tell an employee who is dependent on her job that you only need her half-time now. Another advantage is that you don’t have to become an expert in a particular area–you can depend on the outsourced company to be the expert, as in the above website/logo example.

Perhaps the biggest benefit of outsourcing is its ability to save you money. This will depend on the size of your company and what specific tasks you outsource, you can save money. For example, my company outsources its IT services (help desk, computer support and maintenance), and we pay significantly less than we’d pay for a full-time IT person to give us the same level of support. We also outsource our bookkeeping and office administration, with similar savings. As we grow, we’ll continue to reevaluate these decisions–it may be that the business case for the IT outsourcing remains good as we grow but that we might eventually hire someone to offload other work from our current people, and since we would be paying them anyway, we could get them to do the bookkeeping as well.

Though Outsourcing has its shares of pros and cons, the many benefits that outsourcing brings far outweigh its cons.

One cons to outsourcing is that you are putting part of your company in someone else’s hands. You have to ask yourself if you can trust them, if you think they’ll stay in business and if they can adapt to your growing and changing needs.

The best advice I have is to carefully think through each function in your business and figure out which tasks make sense to outsource.then just try it! In most cases, common sense will see you through. And you should examine carefully all the pros and cons of outsourcing to make sure that the benefits outweigh the risks.


Phil Labor  is a leading Business Process Outsourcing (BPO) Philippines company that provides dedicated remote staff and offshore staffing service. We specialise in providing staff of the highest quality who will continue to exceed your expectations ongoing. 

You won’t find a group of people who understand business owners’ needs and pain points better than the Phil Labor leadership team.