The Benefits of Onshore Outsourcing

by Linda Fryant on October 17, 2014

It does not only help you with your bottom lines, but it also creates jobs here.

I used to work for a Public Employees’ Union, where “Outsourcing” was a dirty word. To us, it meant the loss of jobs, shipping work overseas – a threat to job security. But Outsourcing has become a common business practice and, truth be known, it is just possible that my former beliefs were wrong.

When business owners, especially small business owners, are looking at the bottom line, outsourcing non-core and non-essential business activities just make sense.

Let’s say you are the Pennsylvania Progressive Plaid Pants Company, and all you do is make Plaid Pants. Your employees are the best and most innovative Pants designers in the country. With all your capital tied up in making this new company fly, do you really need a full-time bookkeeper, an HR Director, and an entire IT department?

All of these functions can be outsourced, to US companies, at a fraction of the cost to your company. Some estimates suggest that a company can save up to 60% of the cost of doing the same services in-house, thus freeing up capital for expansion, advertising, creating new lines…anything.

But how does outsourcing improve the job situation in the US? Many many companies have been formed to take over every day, non-core functions for businesses, and they are right here in the United States.

Almost any kind of professional, financial or technical services can be outsourced. Payroll, medical health insurance, web design, customer service, advertising, legal services – virtually anything not affiliated with cutting and stitching pants could be outsourced – to companies right here at home.

The savings realized by your company will allow you to branch out into Tartan Trousers or Checkered Chinos, while, at the same time, creating employment for a quality individual who works for the company you have hired.

Onshore outsourcing allows you to take advantage of the knowledge of people who are experts in their given field – at a fraction of the cost to your company. There is no need for you keep abreast of all the changes in the new Affordable Healthcare acts. There’s a company for that.

Is there a change in the way you need to report your FICA? The payroll company you have contracted with will make those corrections for you.

Did you just receive a HUGE order from Scotland for Tartan trousers and you need a new computer application to help match up the plaids (seriously – have you tried to make a kilt?!).

No need to panic; any number of fine US companies can be hired to design the application for you.

Some companies might worry about surrendering their sensitive or proprietary information to an outside company. By keeping the work in the United States, where US laws apply, there are not only greater protections offered to one’s company, but also more legal remedies should a problem arise.

What is the enforceability against a company in China that leaks confidential employee information or violates laws?

How can a company in India be sued for failing to deliver the prototype for which you paid good money?

“US companies are held to a higher standard, and by outsourcing to one of these quality companies, you are not only improving your bottom line but also creating jobs here”

You are a job creator.

There are other unexpected benefits to onshore outsourcing. Besides creating jobs in the US, there may be savings to your company that you may not have considered.

Each employee that you do not have to hire will lead to “unanticipated savings.”

As President of the Pennsylvania Plaid Pants Company, you will not have to find space for additional non-essential personnel. Your non-employees will not need a desk, a computer or a cubicle. There will be no Healthcare expenses associated with people you do not employ.

Savings could even be realized from the space you do not have to rent, the heating and cooling you do not have to provide, and the vacation days you do not have to grant.

The savings you obtain by outsourcing (without sacrificing any services or benefits to your own employees) could be used to hire more stitchers and designers.

It’s a win-win situation for everyone.

One other issue that your company may want to consider when you are deciding to use an offshore or onshore outsourcing company is quality control. When using an offshore company, US entities have virtually no say in quality control. The component part (let’s say titanium fly zippers) may be ordered, but you will get what you get.

While dealing with US companies, you are not only creating jobs here, keeping jobs here, but you also have the ability to control, accept or reject the end product.