Outsourcing is one of the most effective business strategies that any company can use. Especially with the uncertainties and challenges brought by the COVID-19 pandemic, companies were forced to cut down on their costs by downgrading physical stores and offices and reducing their workforce. But every business was built with the vision of growth and sustainability, and so business owners would always look for ways in order to survive.
Because outsourcing can be beneficial to companies there are plenty of outsourcing companies or individuals who take advantage of this need and do not perform as expected. If you are a business owner who’s planning to outsource, here are some risks that you should look out for and how to manage them.
RISK #1: HIDDEN CHARGES/COSTS
Outsourcing should be cost-effective for you – that’s why you decided to go for it. However, there is a risk that your provider may have not been transparent especially during the initial stages of discussion. Examples may be additional costs for the use or upgrades of certain software, or after-hours service charges that are not clearly stipulated in the contract.
To avoid this, discuss a clear view of your requirements and the scope of their work. This way, the outsourcing company can provide rates based on your needs and tailor fit it with your budget. Don’t be afraid or intimidated to ask questions especially where extra costs are concerned. Every business is on a budget and outsourcing companies are aware of that. And before signing the Services Agreement, ensure that the list of services is in place. Make sure you are notified for any future fees, add-ons, and purchases before it is billed to you.
RISK #2: COMMUNICATION BARRIER
Communication is key in every company, more so between you and your outsourcing company. You simply can’t row your boat in the same direction if you don’t understand each other. Different time-zones, lack of fact-to-face meetings and cultural differences can be hindrances to proper communication.
First, check the level of the team’s English and make sure it is understandable. Virtual conferences and meetings can compensate as face-to-face and try to have them as often as possible.
It is also important to note that if the outsourcing company has a different time zone, they should be able to adjust to you so your communication is quick and easy. As for cultural differences, find out in advance about your outsourcing partner’s limitations, such as holidays and their duration.
RISK #3: QUALITY CONTROL
One of the outsourcing risks is poor quality. They may sound promising at first, but they turn out to provide inadequate services. This is common among businesses who wish to save money by hiring newbies or inexperienced providers.
It is always recommended to check the background of your provider before hiring them. Ask for their portfolio and samples of their previous work.
Keep a good and open communication with your provider so that you can work with whatever barriers or problems that may arise in the course of your business. A relationship is a two-way street and you cannot expect consistency on the quality of work that you expect from your provider if you don’t do your part.
RISK #4: HIRING A SCAMMER
Scammers lurk everywhere online and you might end up hiring one. A lot of business owners have transacted with fraudulent people, posing to offer the best services; a common example is an outsourced administrative assistant. After they get your money, they disappear, or sometimes they start and leave the work half done.
To avoid this, be vigilant in your search. Give ample time in reviewing their portfolio and look for reviews and testimonials, especially on individual providers. Ask for their previous work experience and companies they have catered to and investigate. Insist on a face-to-face meeting to discuss your partnership. Don’t pay upfront especially when the service has not yet been rendered.
But don’t let these risks stop you. The pros of outsourcing do outweigh the cons. Just be vigilant and do your research before signing in. Risks, after all, are part of doing business.