All companies are looking to make a profit, and in a globalized market, where everything is connected, sharing and dividing the workload abroad has become one of the ways you can achieve this. Of course, some may open new businesses abroad to be present in another market, though here we specifically mean - outsourcing.

This isn’t anything new, business owners have been outsourcing work to other workshops or regions for centuries, it is inevitable in a dynamic and healthy economy. And though it is sometimes shunned for “destroying jobs”, it is not destroying but just placing them somewhere else and later creating even more jobs.

But the question remains - what should be outsourced and what shouldn’t be touched?

Why Are Companies Outsourcing?

In short - to save money. The long answer, however, is a bit more complicated. The main motivation behind outsourcing should be reaching out to skilled labor you cannot otherwise obtain. If you, for example, have a complex product that is made from many different parts but you don’t have the machines or know-how to make a certain part, then you need to outsource to someone who can. 

Also, if a part of a company is deemed temporary, or non-essential, such as for a project with a relatively short deadline, outsourcing should be considered, instead of hiring or training someone for that job yourself. 

Essential VS. Non-essential

Essential work, a definition that has drawn much attention during lockdowns, is usually seen as that without which other sectors cannot function at all. So depending on the specific field, an essential worker could be an engineer, a truck driver, or a production line worker whereas roles that are integral to every business, like financial support, could be outsourced to a payroll company since it's a less niche task.

Those who are directly in the production chain should preferably be employed directly and not outsourced. On the other hand, the service sector, as well as counseling such as HR, are usually considered non-essential and can be found elsewhere. Companies that are providing HR to Australian firms can be found all over the English-speaking world, and even further. They offer a chance to cut costs while securing a high-quality and dedicated resource. 

Freedom to Concentrate 

While trying to solve this puzzle, consider the following - what are you able to outsource that will boost your efficiency? Being able to concentrate on finishing projects means you have to have certain things done quickly and professionally, that is without a delay that may be caused by negotiating with customers or having to solve inner-company conflicts. 

Using conference calls to save time is one option, though this could also be done by outsourcing client support. By not having a hotline open 24/7 to receive angry calls and clumsy complaints, you can spend the time concentrating on actually running the company and earning money. 

Counting on Efficiency 

Efficiency is key in providing any service or product, so besides looking out for what will boost your efficiency, the reverse question is important too - what is bringing it down? Doing a regular analysis of a firm’s structure, profit, and other factors, you can determine where the weakest points are located. Working from there, it is easy to determine which sector, or area, is ready to be outsourced. 

For example, a low income, and low-efficiency position in a company should be outsourced to somewhere where it will be done better for less money. In the meantime, the worker in that position should be trained to do a transfer to a higher income position, where their new skills will do greater good for the company.

Any Legal Restrictions?

In free markets such as Australia, there are no laws that explicitly regulate outsourcing, and it is therefore up to specific government job regulations, or regulations that deal with a certain industry to better define this category. Some politicians try and make careers out of stopping outsourcing and promising to implement various laws to put an end to such a practice, though truth be told - the economy and business owners have long before decided that they like it the way it is. 

The only real legal issue here is tax evasion, as sometimes it happens that an outsourced foreign workforce is not receiving their gross salary, only the net salary, though that, in essence, is a concern for the recipient country. 

Outsourcing, co-working, migrating offices… whatever you want to call it, it’s a legitimate business tactic and should be used when there is a need for it. Carefully calculating your position will show you the best possible option when it comes to this, so don’t rush it, but don’t refuse to accept that it may be a good thing for the firm.