How Outsourcing Software Jobs Can Save You Money

How Outsourcing Software Jobs Can Save You Money



How Outsourcing Software Jobs Can Save you​ Money
Pay an​ individual outside of​ your company to​ complete a​ software project for you​ and you​ could find yourself saving money in​ the​ process .​
This is​ a​ concept which may seem counterintuitive to​ some but those who have embraced the​ idea of​ outsourcing realize the​ cost savings associated with the​ process is​ one of​ the​ benefits .​
Outsourcing results in​ an​ overall cost savings for a​ number of​ reasons .​
Outsourcing contributes to​ reduced labor costs and greater productivity .​
Additionally,​ outsourcing virtually increases manpower giving companies greater capabilities .​
Reduced Labor Costs
For many the​ most important reason for outsourcing is​ to​ reduce labor costs .​
Employers may not be obligated to​ offer benefits such as​ social security,​ Medicare and workers’ compensation to​ the​ workers who are completing the​ outsourced work .​
Additionally,​ these individuals often have their own offices and computer equipment and are capable of​ completing their work offsite .​
Labor costs can be a​ significant part of​ a​ company’s budget for the​ year .​
a​ company that is​ able to​ reduce their labor costs will be able to​ enjoy a​ greater profit margin without making any other changes to​ their business operations .​
There are certainly other changes which can be made to​ increase profitability but reducing labor costs is​ a​ guaranteed method of​ increasing profitability while other methods of​ increasing profitability such as​ marketing different niches will not guarantee success .​
Greater Productivity
Another benefit of​ outsourcing is​ increased productivity .​
Greater productivity can be another cost savings benefit for companies .​
When work is​ outsourced there are a​ number of​ factors which contribute to​ increased productivity .​
Productivity may increase due to​ workers being assigned appropriate projects,​ workers being more efficient and less cases of​ underutilization .​
Assigning workers to​ tasks that are beyond their capabilities is​ one way to​ cause a​ decline in​ productivity .​
While challenging employees to​ think for themselves and take on​ increasing responsibility is​ worthwhile,​ giving an​ employee and assignment he is​ not qualified to​ complete can be damaging to​ productivity because of​ the​ learning curve involved .​
This is​ why it​ is​ so important to​ outsource complicated software tasks to​ experts in​ the​ industry .​
They are often able to​ complete complex tasks quickly and efficiently .​
Outsourcing also makes employees more efficient because by allowing individuals to​ focus on​ only one task at​ a​ time there is​ less time spent transitioning from one task to​ another .​
Many employees and employers think multi-tasking is​ a​ way to​ increase productivity but it​ can actually have the​ reverse effect .​
Employees with too many responsibilities may feel pressured to​ work on​ each task each day .​
This can be detrimental because each time the​ employee switches from one task to​ the​ next it​ is​ necessary to​ get back up to​ speed with the​ new task and remind himself where he left off when he stopped working on​ the​ project .​
Finally,​ outsourcing can lead to​ greater productivity by reducing underutilization .​
For example outsourcing very specialized projects requiring expert analysis is​ preferable to​ maintaining this expert on​ staff when their services are only needed occasionally .​
If this were a​ salaried employee he would be greatly underutilized .​
However,​ outsourcing these occasional projects to​ an​ expert prevents the​ underutilization phenomenon .​
Increased Manpower
Another way outsourcing can save you​ money is​ through providing your company with increased manpower .​
This is​ especially important for smaller companies who would normally be precluded from attempting to​ secure larger government projects .​
This is​ because there are typically requirements regarding the​ number of​ employees a​ company must have available to​ work on​ the​ project .​
Maintaining a​ network of​ qualified individuals gives a​ company more bargaining power when negotiating larger contracts.
Outsourcing is​ really ideal in​ this situation because it​ enables the​ company to​ work with highly qualified individuals when necessary without having to​ retain these individuals as​ salaried staff members .​
This is​ significant because niche experts often become so specialized that working as​ an​ independent contractor is​ really their only option because as​ a​ salaried employee they are more of​ a​ liability to​ companies than they are an​ asset .​
This is​ because many companies do not want to​ bear the​ burden of​ keeping these individuals on​ staff when they can outsource the​ work to​ them on​ a​ per contract basis .​




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