Some people believe that companies who outsource are losing control over their own work. They fear that the outsourced employees may slack off and not show up, or may not show up at all. This is actually an outdated view of outsourcing. There have been many improvements in the industry since the early days of outsourcing companies, and this article will explain why companies who outsource often lose control of their projects.
In earlier years, it was commonplace for a company who outsourced to say that they were nearshoring, because they would send their jobs there. But this description did not make much sense. In fact, many people thought that nearshoring meant sending jobs there when the company could be doing them in-house. But now that word has changed, and companies who outsource do mean that they are nearshoring. This is because they hire people from far away–or countries like India where labor cost is much lower.
One example of an outsourcing firm that is gaining popularity is accounting firm RBC. A lot of small businesses are going through financial difficulties at the moment, and they often outsource accounting work. Their revenues are falling, and they do not have enough cash to run their accounting departments. So they outsource their accounting work to an outsourcing firm. The accounting firm in turn gets paid for its services by the client company. The benefit to the client company is that it cuts costs by contracting with an offshore outsourcing firm instead of having to create its own accounting department.
The United States government is trying to help its companies by exempting them from paying taxes on the income of American citizens who work outside the country. Companies who outsource work to other countries are able to take advantage of this policy. Many multinational companies who outsource to low-quality services abroad have established operations in the United States. These companies can increase their revenues and profits by employing workers from other countries. Some even transfer all their non-core activities to the low-quality services provided by these outsourcing companies.
The myth that offshore outsourcing creates cost advantage to a foreign company is also untrue. There is no advantage to the client company if the cost of hiring the services of a third party company is more than the cost of making the employee in the first place. Cost effective solutions are offered by offshore outsourcing.
Another myth that is gaining popularity is revenue recognition. Revenue recognition is important when a company wants to outsource. Most outsourcing companies offer the services of freelancers who are capable of generating work orders based on a contract basis. In this way, both the client company and the freelancer get the job done, yet the company does not lose money. On the contrary, the freelancer makes a good profit and the client company to increase its revenue.
Companies who outsource do not hire an employee based on the color, gender or race. They hire according to requirements and abilities. These companies do not care about how the person looks or whether he has a college degree. They simply want someone who is capable of performing the required tasks and who they can afford to hire. This is why freelancers are capable of generating more work orders by working for the low prices that they are offered by these outsourcing companies.
There is another myth that is gaining popularity among companies who hire freelancers. They believe that customers who communicate with the hiring manager using email are less likely to be satisfied with the final product. Thus, companies who outsource usually offer customer service via email. However, this myth has no basis in reality. The clients who contact the companies who outsource their projects to them have better satisfaction levels.