The Benefits of Outsourcing: How It Can Save You Money

As a business owner, you’re always looking for ways to cut costs and increase profits. One area where you might be considering making a change is in your workforce. Outsourcing your work to a company overseas can be a cost-effective way to get the job done. Here are some of the benefits of outsourcing:

Lower Labor Costs

One of the most significant advantages of outsourcing is lower labor costs. For example, let’s say you outsource your customer service to an outsourcing company. The average hourly rate for an outsourced employee is typically lower than hiring an American employee at minimum wage in California, which is currently $14.00 per hour. If you hire an American employee to work full-time at minimum wage, it would cost you around $29,120 per year, when you factor in payroll taxes, workers’ compensation insurance, and benefits.

By comparison, outsourcing the same job to an employee overseas can cost as little as $5.00-$7.00 per hour, or $10,400-$14,560 per year for a full-time employee. This means you can save $14,560-$18,720 per year by outsourcing one position instead of hiring an American employee at minimum wage.

Access to Skilled Labor

Outsourcing can also give you access to skilled labor that may not be available in your local area. For example, if you need software developers with specific expertise, you may struggle to find qualified candidates in your city or state. By outsourcing to a company with a global workforce, you can tap into a larger pool of talent with the skills and experience you need.

Increased Efficiency

Outsourcing can also increase your business’s efficiency by allowing you to focus on your core competencies. By outsourcing non-core functions like customer service or data entry, you can free up your time and resources to focus on what you do best. This can help you streamline your operations and improve your bottom line.

Flexible Staffing

Outsourcing also provides flexible staffing options that can help you adjust to changing business needs. For example, if you experience a surge in demand during the holiday season, you can easily scale up your outsourcing team to handle the increased workload. Conversely, if business slows down, you can scale back your outsourcing team to save on costs.

Conclusion

Outsourcing can provide significant benefits to businesses looking to cut costs and improve efficiency. By outsourcing non-core functions to an outsourcing company, you can access skilled labor, lower labor costs, and flexible staffing options. While outsourcing does come with its own set of challenges, such as communication barriers and cultural differences, the benefits may outweigh the risks for many businesses. By outsourcing just one position, you can save thousands of dollars per year, which can help you reinvest those savings back into your business.