Modern businesses are adopting modern solutions for some of the most common problems entrepreneurs face worldwide. In order to exponentially boost the business’ productivity and development, many turned to employee outsourcing to deal with the company’s woes.
However, many still do not understand the intricacies involved in outsourcing. Better yet, some still do not know how employee outsourcing actually works and how it can help businesses of all sizes. Taking this into consideration, here’s a quick overview of the industry of employee outsourcing and how it benefits ecommerce businesses from all over the world.
What Is Employee Outsourcing?
Before we go through the details of the employee outsourcing industry, it’s important to know what outsourcing truly means. Outsourcing refers to the business practice of hiring or contracting business functions to third-party service providers.
These are often but are not limited to marketing, talent acquisition, human resource services, administrative services, and more. The primary goal of outsourcing is to lessen the in-house employees’ workload. It also helps accomplish tasks significantly faster.
Employee outsourcing practically refers to the same practice. But instead of outsourcing a whole other organization or team, employee outsourcing typically involves individual contractors or freelancers. Individuals hired through employee outsourcing are not official company employees. They are typically hired per project or by contract.
Benefits of Outsourcing Employees
There is a wide array of reasons why global companies outsource services from other parts of the world. With that, here are some of the most notable benefits of employee outsourcing:
Reduce Labor and Operating Costs
One of the most common reasons why companies outsource services is to reduce their costs while also boosting their business’ productivity.
Some of the most popular countries to outsource talents come from third-world countries such as India and the Philippines. And one of the reasons why companies choose to outsource from the locations is because the average salary is significantly cheaper than in countries like the US.
This is normally attributed to the fact that there is also a great difference between the cost of living in third world countries and first world countries. For example, the average cost of living in the Philippines is around $624 a month. Compared to the world’s average cost of living, this is 1.5 times lesser. To add to this, the average cost of living in the US is around $3,189.
Aside from cheaper salaries, outsourcing employees also save businesses from spending on facilities, equipment, and supplies. Acquiring all of these for your on-site employees requires a lot of funds. Aside from that, regular check-ups, employee training, and maintenance also add to the business’ operating costs.
Outsourcing even a handful of employees lessens these costs while simultaneously boosting your company’s productivity and efficiency.
Access A Larger Pool of Talent
While not as enticing, outsourcing employees from all around the world opens a whole new pool of talented individuals that may help your business grow. One of the biggest hindrances in on-site business operations is the limited pool of talents that you can choose from and hopefully hire.
If you are located in a relatively small city or community, your chances of finding quality employees grow smaller and smaller. Therefore, outsourcing some of your company’s functions can help you find people from different countries that are more skilled and adept in their field.
Over the past few years, the practice of outsourcing employees has opened the doors for millions of people. It provided them the opportunity to be part of a global company and earn a competitive salary above their national average.
While this significantly benefits the employee, companies can also take advantage of the larger talent pool to find some of the world’s best. Outsourcing then becomes a collaborative industry that helps bring people and cultures together.
Focus on Core Business Tasks
Employee outsourcing often involves mundane but equally important tasks. When starting a business, it is often hard to give up control over administrative tasks and logistics. New entrepreneurs often find themselves working on these instead of focusing on planning for the business’s growth and development. Instead of working on their marketing tactics, social media presence, and online sales, they are stuck dealing with invoices and employee payroll.
Outsourcing employees and delegating tasks that don’t particularly require your input allows you to focus on core business functions such as networking, devising a marketing strategy, developing a business plan, and more. It pushes you to let go of relatively unimportant business operations such as scheduling, payroll management, onboarding, customer service, etc.
Risks of Outsourcing Employees
While employee outsourcing offers a lot of advantages, there are also several risks that come with it. Here are some of the disadvantages of outsourcing that ecommerce businesses need to look out for:
Communication is crucial in any business process. When you outsource some of your business functions, there are problems in communication that you may face. One of which involves language barriers between people from different countries and cultures.
Let’s say that one of your outsourced employees is not as confident and fluent in communicating, whether written or orally. There may be difficulties in terms of receiving and understanding instructions, as well as relaying crucial details and information.
Remote work is one of the heavily debated topics when it comes to employee management. When you outsource employees, you automatically relinquish first-hand control since there is no possibility of face-to-face interaction and supervision. This is one of the reasons why many traditional business owners and entrepreneurs shy away from remote setups.
Outsourcing employees from the other end of the world make it difficult to manage and check your employee’s performance and activity. However, there is a wide array of task management and productivity software that can make this easier to deal with. Global companies use programs such as Hubstaff and Asana for productivity and task management for remote work setups.
Tips for Outsourcing Employees For Ecommerce Business
Every business decision comes with its fair share of advantages and disadvantages. So if you’re leaning towards outsourcing a handful of employees, here are some tips that may help guide you along the way:
- Provide a business process handbook to make it easier to onboard remote employees.
- Invest in task management and productivity software to help you manage your remote team easier.
- Ensure that your employee is well-equipped to communicate with you in one form or another.
- Set regular weekly or monthly meetings for important productivity and progress updates.
- Keep in mind of time differences when managing outputs and expectations from your remote workers.
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