There are eleven avoidable mistakes, which will affect your business negatively if you do not handle them well. Anyway, what is outsourcing anyway…? Outsourcing work is simply seeking the services of an individual or firm to take care of your normal business operations. These services may be sought internationally or locally. Outsourcing work, or Business Process Outsourcing (BPO) as it is commonly known, is informed by various factors: Limited resources, need for experts, and the desire to operate at par are some of these factors. Cost cutting is the core need here.
However, lack of proper research and strategy can spell doom for your business. Poor administrative and management factors can also lead to huge losses. This is why I have identified 11 common mistakes, which must be avoided when outsourcing work. I have classified these mistakes into the following categories:
Management and Administrative factors
Market Research factors
Traditional, Religious and Cultural factors
Zonal and Language factors
Legal and Litigation factors
Let us get started.
Management and Administrative Factors
- Not knowing basic business principles
You should not rely so much on outsourced work or services thereby ignoring practical business trends. Once the outsourced experts or professionals know that the business owner is not well informed, they might try intimidation tactics or make unrealistic demands.
- Thinking that outsourcing is always meant to cut costs
On contrary, it does not necessarily cut the cost but rather it brings on board time management and efficiency in running the business. To avoid regrets you have to hire and outsource from an informed point of view.
- Assuming the outsourced services or work is none of your business
Once you have hired someone (or a group of people) to outsource your work, keep an eye on their progress — do not let them run amok within your business. YOU are still the leader and need to act as such. Treat your outsourced workers as employees.
Unsupervised, underpaid, or demoralized labor is a liability to your business. The staff you have hired will never match your expectations if you do not treat them well — as a part of YOUR business.
- Assuming that business costs associated with marketing and internet connections will go down is a lie.
In fact, the costs will rise or even double. Thorough research should be done to assess the advantages and disadvantages of information technology reliance.
- Thinking that your supervisors or managers will embrace outsourcing is a big joke.
Some of your employees will initially stand in the way of your idea to outsource certain aspects as a way to safeguard their own interests. There needs to be staff training about the outsourced work so that they can properly embrace it. To avoid sabotage or backstabbing from your current staff, they need to be well informed of your plans and understand that THEIR jobs are NOT on the line — you are just looking for some EXTRA help. Either you, or someone else qualified to broach this subject, needs to reassure your staff that the outsourced workers are not their enemy, and, like they are, are valued members of the team as a whole.
- Assuming long-term outsourced work will be cheap and easy
To maintain good quality outsourced work, you need to be prepared to pay more than the local market rates. You get what you pay for, and good work never comes cheap. Just like with normal employees, you may want to give raises or other incentives to keep the best of your outsourced workers happy and on your team.
Market Research Factors
- Outsourcing work or services without proper market research
Not doing your research ahead of time will lead to not getting value for your money due to unrealistic projection. You should study the market well before engaging the outsourced services. This will enable you to know the business trends within your area of operation.
- Hiring unqualified staff
Thorough research of WHOM you are hiring will also be required before outsourcing. Doing research about the firm offering outsourced services is also vital. This will save the business from unnecessary squabbles and losses.
Traditional, Religious, and Cultural Factors
- Not factoring in religious, cultural, and traditional aspects of the outsourced workers is suicidal
There will be times you will need urgent tasks to be done, but due to cultural or religious observations or celebrations, it will not be possible. Get to know the backgrounds and beliefs of the people you hire
so that you can factor in their “must have” days off well in advance. You never want to be stuck in a situation where you are counting on a certain team member only to have them not show up to work that day due to a religious observation. This is also, why it is important to hire a diverse group of individuals. If everyone on your outsourcing team has the exact SAME culture and beliefs, there could easily be times when your entire staff suddenly goes missing — leaving you with no one to do the work!
Zonal and Language Factors
- Not considering barriers such as location, time, and language
You may be forced to operate at odd hours if your outsourced staff is in a different time zone than you are. The language barrier may also negatively affect the smoothness of your operations. This mostly applies to outsourced work from the international market.
Probably this area deserves the MOST consideration when hiring outsourced workers/services.
In many cases, time zones will not be an issue. For example, if you are hiring freelance writers to update a blog (like this one right here!), it will not matter if they are writing at night or in the morning so long as they meet their deadlines. However, if you are hiring someone to run your customer service hotline and they are on the other side of the world sleeping during your hours of operation that can be a major problem.
Language can also work to your advantage or disadvantage. In most cases, you will want someone who speaks YOUR language — and speaks it well! However, if you are trying to broaden your market, hiring someone who speaks a different (or multiple different) language(s) can be an advantage as they can act as translator(s) for international business ventures. Just make sure they speak enough of your language that you can easily communicate with them!
Legal and Litigation Factors
- Not signing contracts/Not honoring contracts
Failure to sign a contract, signing a bad contract, or not honoring a contract with the outsourced service provider may lead to legal repercussions. Legal issues are very expensive if not handled well so it is imperative that a signed agreement should have provisions for every scenario arising from misunderstanding.
With all this in mind, would I recommend outsourcing…?
Outsourcing will enable you to achieve goals that initially seemed unrealistic. It is also a way of gaining knowledge and experience from outside experts, and that can be invaluable. Outsourcing work enables you to have a competitive, slim, and effective work force. Knowing how to delegate work is part of your duties as a business leader. Outsourcing work or services is definitely the way to go.