Should You Outsource Jobs Overseas?

by Jennifer Goforth Gregory on November 1, 2012
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“Outsourcing” seems like a dirty word these days. In general, Americans don’t like sending jobs overseas, as demonstrated by everything from merchants proudly displaying “Made in the U.S.A.” labels on store shelves to the candidates’ heated discussions in the recent U.S. presidential debates.

But for many small-business owners, outsourcing can make labor affordable and give them access to workers with skills that are unavailable locally. In many cases, the cost savings may help keep their doors open — and continue providing jobs for local employees.

Should you outsource work overseas? Here are five questions to consider when making that call.

1. Can you find qualified, affordable talent in the U.S.?

With the emphasis on creating jobs and reducing unemployment in the United States, many small-business owners prefer to first search the regional talent pool for qualified candidates within their budgets. However, if you are unable to find the skills at the rates you can pay, and the job can be performed remotely, then outsourcing may be an attractive alternative for your business.

2. Will there be business ramifications for outsourcing?

With all of the recent press about sending jobs overseas, consider whether you may receive any negative backlash from your community or customers. Do you live in a small town and employ many local residents? Think about the economic impact that your decision could have on your community. In addition, because quality and product standards can differ in foreign countries, you’ll want to research materials and practices to make sure that outsourcing will not lower the quality of your product or service. You should also ensure that all U.S. safety regulations are met.

3. Will the cost savings significantly increase your profits?

Outsourcing requires additional steps for management and quality control. Before making a decision, determine the cost of using local workers and then calculate the cost of outsourcing. If you are considering outsourcing IT tasks, use this chart from Processor.com to help determine the costs of offsourcing vs. in-house for common IT issues.

Make a list of all of the additional tasks and responsibilities that will land on your plate as the result of having to manage remote staff, too. Using these estimated expenses as a guide, determine whether the cost savings on labor will be worth your additional time and any other business ramifications of sending jobs overseas.

4. Will language be a barrier?

One of the biggest challenges that companies have with outsourcing to other countries is that the foreign employees often have limited English skills. Consider the amount of interaction that the overseas workers will have with your employees and customers. Determine whether any communication issues will impact productivity and customer service.

5. Is there a time difference, and will it affect your operations?

Determine the time difference, if any, between the location(s) of your foreign workers and those of your employees and any important customers who may interact with them. Will it interfere with existing procedures or deadlines? In some cases, a time difference may work in your favor, because you can assign projects to overseas workers at the end of your day and have the work completed before you log into your computer the next morning.

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