In the beginning, people hunted animals… grew crops… and lived close to the people they worked for. In fact that was one of the big plusses in working for someone else. If you worked for a local king, his castle and guards would protect you from outside armies, while providing a means to settle domestic disputes.
As time went on, governments became less about getting work done and more about collecting taxes and providing for the general welfare of it’s people.
In the corporate age, people would come to work for a central agency and that organization took on many of the same roles as the kingdoms of old.
Times have changed some. Today, with the advent of a wide-spread Internet some tasks can be done by people anywhere in the world. If this trend continues, many projects will end up having it’s work “distributed” across a large area. This is known as outsourcing.
Outsourcing has become very controversial as many people feel that their jobs are being shipped overseas with no potential for getting a new one, but there’s a definite upside to domestic outsourcing.
Domestic outsourcing is different from off-shoring. Domestic means that you’re outsourcing to someone else in the same country or area. Not only are you providing for your local community, but there’s a real cost-to-benefit increase in staying in a local jurisdiction. When you offshore to someplace far overseas, there’s not a heck of a lot you can do if they decide to blow you off. It’s just not feasible to take someone to court overseas for a few thousand dollars. This means that outsourcing projects overseas comes with a definite increase in risk associated with the decrease in cost. This shouldn’t be surprising as most increases return come with added risk… but there is a reliable way to improve your returns without adding this risk. And that is…
Domestic Outsourcing.
Domestic outsourcing IS the wave of the future. Large corporations are being overtaken by the large waves of competition from smaller, more efficient, organizations. While some large industrial applications can never be outsourced, many can be.
Here are some things to consider when outsourcing a project:
The Pros:
The biggest decrease is in cost. If you have only a small project that needs done, why go thru the hassle of hiring someone and paying all of those taxes and related fees? Not to mention the potential legal issues of hiring a staff.
Liability issues, discrimination laws, the list is huge.
The next benefit is a decreased management overhead. This is really important if you’re a small business. You shouldn’t be spending money hiring a manager when money is too tight to effectively advertise. Simply hire someone as an independent contractor and arrange an agreement to pay them based on performance.
Labor is easier to find. Hiring means asking around, getting referrals, collecting resumes, placing classifieds, posting job lists, the works. Hiring out means calling a temp agency, placing a help-wanted on guru.com or one of the other work @ home website, or one a dozen other super easy ways to find quick work. You have the benefit of a high supply of workers, low demand for work on your side.
The Cons:
The biggest negative reduced accountability. In a traditional employment scenario you’ve got boss looking over each person’s shoulder reminding them what their job is. Out-sourcing is not like this at all. It’s important to structure payment in such a way that the project gets done. If you spend thousands up front, there’s always the risk that they could bail out. This also means that you should take a look at previous work. If they have a habit of being dedicated to their past projects… then they’ll probably be dedicated to you too. Due diligence is must. Outsourcing is not for the micro-manager.
Repetitive or long term projects are also difficult to efficiently outsource unless you can get a long-term, reliable, maintenance agreement. Easier said than done. It’s much easier (and usually cheaper) to hire someone for $20 an hour to work full time ($40,000k a year) and finish 40 different projects than to outsource each project and manage the risks and payment headache. Especially if you’re on a deadline or counting on each project to be done according to tight specifications.
Conclusion:
:Depending upon your needs, it may be a good idea to look around at your outsourcing options. I would definitely recommend trying domestic outsourcing first. If you’re worried about losing touch with your contractors then hire someone local, if you’re willing to assume added risk for improved cost then try your hand in the national markets.
It’s a great way to find people with different skills for your organization. Stop wasting your time trying to be the “jack of all trades” for your company and let experts handle the work for you. That’s what the efficient distribution of work is all about. Give it a try!
Aaron Colman, helping business make money online.
Web design, custom PHP scripts, MySQL databases and more.
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