The Impact Of Outsourcing On Company Culture

The concept of outsourcing has gained more and more popularity in recent years, and you too may be mulling over the idea of outsourcing one or more of your tasks. There are a variety of jobs you could outsource – traditionally outsourced tasks like accounting to more traditionally in-house tasks like product development or marketing. However, like any decision you make for your business, you have to consider the pros and cons, as well as the impact on your company’s culture.

The Pros of Outsourcing

When you are able to outsource some of the more time consuming functions of your company, you free up your time, and that of your employees to focus on the important stuff. It also means you don’t have to hire more people. You can pay the outsourced firm as a contractor, thus saving on training new hires and being responsible for benefits. It also gives you access to a larger talent pool, than just your employees. You could even have access to talent in other parts of the country, or across the world. The great thing about outsourcing is that you can choose a company or team that specializes in a particular skill set, and that means you will be able to operate more efficiently.

Cons of Outsourcing

One of the most significant disadvantages of outsourcing is the lack of control over the contractor. While you can provide direction concerning what you need accomplished, you give up a certain amount of control when you outsource. Difficulties with communication can also come into play. If you’ve outsourced to someone in another time zone, then time differences can be challenging. Furthermore, you have no control over the quality of the product, and that is something that you definitely have to discuss beforehand. Finally, privacy regarding intellectual property can be a concern, especially if you are outsourcing to someone abroad. It can leave your company unprotected. This is why anything that involves sensitive information should generally not be outsourced, unless absolutely necessary.

Impact On Company Culture

With all the potential benefits of outsourcing, it can be a very attractive prospect. And a lot of companies outsource without considering the impact it may have on their employees and culture. If outsourcing is part of your business plan, then you also have to take steps to ensure it doesn’t have a negative effect. Studies have shown that a positive work culture leads to higher than average levels of productivity, so it is well worth your while to maintain it.

Some of the ways outsourcing can negatively impact your company culture are:

  • Employees are upset because they may feel like they are being replaced.
  • Employees are confused because they don’t understand why company functions have to be outsourced.
  • Dealing with a different company for everyday tasks can add to the challenges of the daily workflow.

While the value of outsourcing in today’s constantly changing business environment cannot be overstated, it is important to ensure that your employees see the positive side too. An immediate positive that you can point to is that it takes some weight off the employees’ shoulders. Managers should encourage employees to view outside contractors as complementary to the business, and in some cases, necessary. To alleviate any concerns about job security, management should prioritize in-house employees and keep them in the loop about any changes.

Employers who are successful at integrating outsourcing with their internal personnel are almost always employers who have given their employees a sense of security. People perform better when they feel like they are part of a unit. It is the responsibility of the employer to foster a sense of belonging among employees and keep morale high. For outsourcing to be complementary, it should provide relief to internal employees and be a facet that does not interfere with their duties. Executed effectively, outsourcing can be extremely beneficial to a company’s culture.

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