Outsource vs In-house – Which Way to Go?

Outsource Vs In-House Work

Outsource InHouse business supply chain decision

In-house work is done by employees on your payroll. Outsourced work is done by freelancing professionals, day laborers, consultants and professionals paid per job. In-house work must be done by employees who generate labor costs, payroll taxes, insurance costs and may be unavailable when required. Outsourced labor does not require payroll taxes, unemployment insurance, benefits or vacation time.

Outsourcing has always existed. Why retain a janitor on staff who may be out sick when you can hire a cleaning company? Why pay a Certified Public Accountant a salary year-round when he can be paid to do taxes on a quarterly or annual basis? Outsourcing is simply a matter of hiring individuals or companies to provide a specific service or product instead of relying upon employees on the payroll to do it.

Main Benefits of Outsourcing

    • Outsourced labor does not require payroll taxes, unemployment insurance, benefits or vacation time.
    • Outsourced labor is hired per project or for a specific time period without requiring the complex process of hiring and firing employees.
    • Outsourcing eliminates the ongoing cost of maintaining an employee and converts it to a periodic cost.
    • Outsourcing via the web allows companies to tap into expertise located anywhere in the world.
  • Outsourcing can save money by allowing employers to tap into lower cost labor pools.

Why You Should Outsource

Job outsourcing does not equate to job loss. Companies like Ford used to have cafeteria workers on payroll. Now they save money and improve service by paying a food service company to manage their cafeteria. Job outsourcing has expanded beyond the standard service sets of financial, cleaning and food service. The internet has expanded the range of services available to include web design & development outsourcing, article writing and content creation, seo outsourcing, PPC advertising outsourcing, and management, IT security, translation, technical support, event planning and administrative services, and so on.

While the image of outsourcing is the reliance upon cheap but low skilled laborers overseas or without adequate skills, this is only part of the story. Finding a translator for a rare Asian language no longer requires multiple newspaper ads around the country but a simple web search. Retired professionals are now able to accept outsourced work on a part time basis to help generate income. Outsourcing firms also tap into the highly skilled but underemployed labor pool in rural areas, those working part time but wish to work full time, and professionals on furlough.


2 thoughts on “Outsource vs In-house – Which Way to Go?

  1. Yes it’s very nice that you have given project wise contracts means short term contracts and If we ask you to monitor. then what will be your ans ?

  2. You can probably outsource anything that is not the core of your business.
    But I would be wary of outsourcing anything that others may use to copy your business. Then you might suddenly find that you no longer have one.
    Innovention, design, marketing and in some cases production are areas I would guard well. You can outsource parts of this, but not the total package in my view. But I guess it depends a lot on your contracts and whether you have a strong patented product, Somewhere, someone will always copy you if you have a successful product. But why hand it to them on a silver platter?
    My thoughts after a few not so successful startups. But others may have different experiences.

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