Each week, I respond to a question I’ve been asked by another leader. Over the last couple of years, I’ve commented on a wide array of topics. Today’s question surfaces a controversial topic… Why are you a fan of outsourcing?
I want to begin by saying I don’t think outsourcing is the right answer in every situation. However, there are several reasons to consider outsourcing as a legitimate component of your staffing strategy.
1. Expertise. Early in my career, I was given the opportunity to build our corporate communications function. It was suggested that I hire a writer for the team. I was just a kid, but this didn’t make sense to me. My rationale — I knew there were different types of writers – some were good at writing speeches, some were good at writing training materials, others had a special talent for journalism. My fear… if I hired a writer, he or she would have to write everything. I wanted the expertise of a specialist not a generalist. That same logic still makes sense to me – for specialized skill sets, outsourcing may be the right answer.
2. Flexibility. So, if expertise is what you desire, why not just hire full time experts? You certainly can. However, what happens if you decide to change your strategy? What happens when the world changes? What happens when technology makes your expertise irrelevant? Experts and specialists often have difficulty changing roles. Because of this, it’s exceedingly more difficult to be nimble with full time staff. One way to combat this is to select a generalist – however, then you can lack the depth of expertise referenced in my first point. Therefore, outsourcing addresses both issues: Expertise and Flexibility.
3. Scalability. Outsourcing is also a strategy that can create a dynamic workforce. When workload swells, if you rely exclusively on full time staff, you’ll encounter capacity limits. When you outsource with the right partner(s), it’s much easier to expand your workforce as the workload dictates. Also, it’s much easier to cut back when the demand subsides. We just came back from a big event; we used scores of outsourced talent. Now, the event is over, and we don’t have the ongoing cost of maintaining those people on our payroll.
4. Cost. Many people believe outsourcing is more expensive than full time staff. Sometimes it is – often it’s not. To assess the real cost, you need to first assign some value to expertise, flexibility and scalability. These are real, tangible advantages of outsourcing. Also, you need to think about the cost of your overhead. If you have a rich benefits package, it can actually be less expensive to outsource.
So, what’s the right answer? It depends. Try to avoid a blanket position on this topic. If you take a stand for or against outsourcing, you’ll be wrong. It is not a black and white issue. Sometimes it makes perfect sense, and sometimes it does not. Judgment is required. That’s a good thing – judgment should be one of your strengths.[GLS_Shield]
Where do you stand on outsourcing?