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From cost savings to operational efficiencies, there are many benefits companies can realize by outsourcing services to other countries. At the same time, there are some inherent risks a business takes on when they outsource work to another company. That said, all of these risks can be mitigated if dealt with properly. Here are some of the biggest risks of outsourcing and how to deal with them.
SERVIAP can help with your global expansion needs. Contact us today to learn how you can expand your business with PEO in South America and Latin America.
Not Getting What You Pay For
Perhaps the biggest risk of outsourcing is working with a company that doesn’t hold up its end of the bargain. There are so many outsourcing companies out there today that there are bound to be some that simply aren’t good at what they do. There’s also the danger of working with a company that is simply a scam.
The reason why this is such a problem is you will be turning over essential processes and vital data when you outsource. If you are dealing with a company that isn’t reputable, you could be at risk of fraud. Or, if the company isn’t able to accomplish what you’re paying them to do, it could significantly affect your company’s performance.
How to Deal with It
Do your research. Take the time to compare multiple outsourcing companies before making your final decision. Ask others in your field if they have any companies they can refer to you.
Read online reviews when possible. If you can, hold a meeting with the leaders of the outsourcing company so you can ask whatever questions you have and get comfortable with the people with whom you’ll be working.
When you outsource, you’ll naturally be giving up some control of your business. The other company will exert at least some control over whatever processes, tasks, or departments that you outsource to them.
This can be a huge concern to some businesses that need to ensure that branding, messaging, and quality remains consistent across the board. When you lose control of essential processes, there is always the possibility that things get delayed and that other aspects of the business get held up.
How to Deal with It
Consider outsourcing with a Professional Employer Organization (PEO) like SERVIAP. A PEO serves as a co-employer with your company. Your company still maintains control of the recruiting, onboarding, and training of all employees. They also maintain the day-to-day management of their employees. The takes over all the responsibility of administrative HR functions. They process payroll, handle taxes and compliance, and deal with issues such as workers’ compensation and employee benefits. In essence, a PEO is a full-service solution for HR to help you expand your company quickly.
This way, you can maintain control over your outsourced talent while eliminating administrative headaches.
Lower Employee Morale
When you outsource, you always run the risk of having your current employee base worry about their own jobs. It’s only natural that employees will be wary of their company outsourcing certain jobs or departments overseas.
This is especially true if they see some of their co-workers let go or re-assigned because your company has outsourced their department and eliminated their jobs. Poor employee morale can lead to many negative things for companies, including high turnover and lower productivity.
How to Deal with It
Communication is key when you outsource services. It’s important that you notify your employees of the plan, what it entails, and how it will work. Assure your current employees that you are not closing down all of your operations and replacing them with workers overseas.
It’s incumbent on you as the business owner to communicate the benefits of outsourcing to your current employee base. Tell them how it will make their jobs easier by removing some mundane tasks. Explain to them how it will allow everyone to work on tasks that are rewarding, rather than being bogged down by administrative work.
Expand Your Business with SERVIAP
SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in South America and Latin America.