Outsourcing Companies - Negatives

Along with all the positives to outsourcing, there are some bad points to take in to consideration.  Here are a few things to think about:

Fear of Job Loss

No employee likes to have there jobs at risk.  With companies outsourcing current employees may find it difficult to find motivation needed to perform effectively.  This can cause some employees to leave your company rather then risk getting made redundant.

Loss of Control

Companies that use outsourcing feel a threat as some management feel like they are beginning to lose control.  Once someone else is handling parts of your business, customers and clients may not be handled the same way as before or even the way you prefer to handle them.  If full control over your business is important then you may want to reconsider using outsourcing companies.
In outsourcing, you may lose your control over the process that is outsourced

Losing Customers

If not researched thoroughly using call centers or customer related facilities through outsourcing companies can be hazardous.  If you outsource a function that used to be done on-site, some customers may feel disconnected knowing you no longer perform this function yourself.
With outsourcing, your organization might suffer from a lack of customer focus

Security Issues

It is more important than ever to protect customer information. Every company must deal with this issue. It is more challenging, however, to secure data when that data is in someone else’s hands.

Lower Quality Work

In business, you often get what you pay for. While workers across the world can be very competent, the fact is sometimes they lack skills and education. If you need the finest employees, be prepared to pay for them, whether they are in your office or in another country.

Cost effective?

At times, it is more cost-effective to conduct a particular business process, rather than outsourcing it

Security Issues

While outsourcing services such as payroll processing services and tax preparation services, your outsourcing provider will be able to see your company’s confidential information and hence there is a threat to security and confidentiality in outsourcing.  If clients realise that companies are outsourcing they will question the security of there personal details the company holds records of.

Harder to manage

When you begin to outsource your business processes, you might find it difficult to manage the offshore provider when compared to managing processes within your organization

Outsourcing Company failing

In case, your offshore service provider becomes bankrupt or goes out of business, your organization will have to immediately move your business processes in-house or find another outsourcing provider

Not solely working on your projects

Your outsourcing provider might not be only providing services for your organization. Since your provider might be catering to the needs of several companies, there might be not be complete devotion to you and your company

Diverted focus

By outsourcing, you might forget to cater to the needs of your valuable customers as your focus will be on the business process that is outsourced

Hidden Charges

Outsourcing, though cost-effective, might have hidden costs, such as the legal costs incurred while signing a contract between companies. You might also have to spend a lot of time and effort in getting the contract signed

Misunderstandings   

There can be several disadvantages in outsourcing, such as, renewing contracts, misunderstanding of the contract, lack of communication, poor quality and delayed services amongst others.

Communication Problems

Language or cultural barriers can cause misunderstanding for the companies outsourcing

Time Difference

It’s more difficult to keep in touch with a virtual employee if they are in another time zone.  Most outsourcing companies use the Asian subcontinents as there outsourcing location.  In the unfortunate incident the outsourced employee forgets the time difference they may end up getting in touch with you whilst you are sleeping or out of office hours.

Lack of team spirit

If you are outsourcing it is harder to build a team environment as none of the employees will be in the same place.  It will be harder for that employee to feel like his part of the company.

Local Economy Won’t Benefit

The more outsourcing is used in companies the less the local people will be able to find work.  With the recession in place the economic scale is shifting with the aid of outsourcing with the mother countries getting more redundancies and being able to provide less work for individuals.

Company Knowledge

If a virtual employee is not in the same office or the environment then they will be lacking considerable in the companies’ knowledge.  History and other data about companies can be found online but the way they work and how operations are processed in house will remain a mystery to the virtual employee

You know your business best.

No one knows your company better then you do. You know what’s right and what’s wrong.  Outsourcing your company via outsourcing companies can create conflicts in interest as they may not be experts in your industry.  Also if the worker you have for a short period goes to work for your rival then there may be great implications as your key strengths and weaknesses can be exploited.

Someone else is creating your first impressions.

Outsourcing companies will be the first people to see the employee and speak to them too.  They can only provide what you ask for, if it’s not your type of person, personality and work ethics.  Then they may only be useful for work rather then communication.

Their hours are not your hours.

Social media is real time. Let’s say that you have a retail store that is hosting a huge event on a Saturday afternoon, and you have a nice sized fan base that may start asking questions about your event starting Friday evening through Saturday morning on Twitter. Most Internet marketing companies work the traditional Monday – Friday, 9 – 5. Who will be answering those questions?

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