Is Outsourcing Still In?



 

I caught this article in a monthly addition of a magazine our chamber of commerce circulates, and since it proves a point I’ve spoken about concerning the benefits of hiring a Virtual Assistant, I thought I would share it.

Jobs Are Out There…But Where?

Impact Magazine: Phoenix Chamber of Commerce
By Tom Trush

Shrinking operating budgets have directed renewed attention to expenses, causing some business owners to bring previously outsourced tasks back in-house. However, that can be risky, especially for companies focused on growth.

“If people who should be growing the business are focusing on the organization, then right off the bat you have a ‘shooting-yourself-in-the-foot scenario’ because they need to be growing the business, not managing the organization,” said Anne Caldwell, president of Phoenix-based human resource strategy firm Outsourcing Solutions.

Caldwell added that one problem is that most small business owners have a difficult time separating tasks related to growth and management. As a result, productivity lags because they are taken away from core responsibilities to complete the tasks brought back in-house.

“A business owner cannot know everything and should not spend time trying to learn everything,” she stressed.

A big reason why Caldwell believes outsourcing will remain strong is people’s desire to hire knowledge. Not only are regulations in industries such as human resources changing constantly, making industry specialists essential, but the expenses involved with hiring an employee are greater than outsourcing.

Although outsourcing is often associated with U.S. companies hiring outside the country, the weak dollar is causing companies based in countries such as the United Kingdom, China and Japan to seek more U.S.-based talent.

Brad Porteus, CMO of Elance, an online workplace that connects businesses with professionals, says non-U.S.-based businesses outsourcing to U.S. service providers outpaced growth in every other segment in the fourth quarter of 2007. Also, the growth rate in offshore businesses hiring on Elance exceeded the growth rate of hiring by U.S. businesses.

A trend seen by venture capitalist Armando Viteri is more movement away from India and development of new outsourcing growth areas.

“Due to the success of the Indian economy in generating demand for knowledge workers to support the domestic economy, and because of the explosive growth of outsourcing to India earlier in the decade, the cost of Indian development labor has skyrocketed,” said Viteri, who is also CEO and president of neubloc, a global software product development outsource provider.

As a result, he added, U.S. companies are experimenting with providers in Asia, Central/Eastern Europe and South America.