Beyond the costs of additional wages, you also bear the burden of national insurance, extra compliance costs, pensions, insurance, utilities and other costs. That’s why many management teams are increasingly turning to outsourcing – either through specific agencies or to individual freelancers. From sales and marketing to IT support, web development, production, HR and even the finance function (god forbid), almost every role within a company can be outsourced nowadays. The question, though, is at what point this becomes a good idea? While cutting down fixed costs and hassle is a benefit, losing direct control over workers can be a problem. For instance outsourcing customer service to a call centre can make sense financially, because it’s often a routine task which isn’t core to generating profits. But at the same time you lose accountability because they aren’t your own employees, and they are less likely to adhere to the same brand ethos as your own in-house workers would. So this week’s FD challenge is thus: When is outsourcing a better option than employing new staff? Let us know your thoughts.
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