Outsourcing 101: Revisiting the Meaning of the word

We thought it wise to once again give the definition of outsourcing that we will know about, well, for those who are most probably just encountering the word. Read on…

Definition: Outsourcing is the practice of having certain job functions done outside a company instead of having an in-house department or employee handle them. In outsourcing, the functions can be outsourced to either a company or an individual.

Outsourcing has over the past decade, become a major trend in human resources. It’s simply the practice of sending certain job functions to professionals outside a company instead of handling them in a house. Today, several companies, both large and small, are turning to outsourcing as a great way to grow while restraining payroll and overhead costs. Can you see a way to make this work for your business?

Here are some tips!

First, make sure the company you’re hiring has a good track record and can really do the job. That means you will have to get (and check) references. Ask them for former or current clients’ contact details and when you call, ask about their satisfaction with the client. Find out what industries and what type of workload the firm or individual is accustomed to handling. Will your deadlines to be met, or will they push aside your small business’s projects for a bigger client’s emergency project?

Also, make sure you feel comfortable with who will be doing the work and that you can discuss your concerns and needs openly. Ask to see samples of work if appropriate (if you’re using a graphic design firm, for example).

Independent Contractors

You may want to hire independent contractors as an outsourcing option. For example, Instead of hiring an in-house bookkeeper, you might outsource the job to an independent accountant who comes in once a month or does all the work off-site. Independent contractors can be more flexible and lower in cost than outsourcing firms. But outsourcing firms have proven to be more efficient because of the pool of labor they bring to the table. However, before hiring an independent contractor, make sure the individual you use can do the job.

An independent contractor is an individual that handles your outsourcing needs The IRS has stringent rules regulating exactly who is and is not considered an independent contractor. The risk: If you consider a person an independent contractor and the IRS later reclassifies him or her as an employee, you could be liable for that person’s Social Security taxes and a wide range of other costs and penalties. So you do your job by hiring right. You have years or results on repercussions in view.

Daven Michaels is a New York Times Best Selling Author and CEO of the premier global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! Inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.

1 comment on “Outsourcing 101: Revisiting the Meaning of the word

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