What is outsourcing?

Outsourcing is a business practice that consists of transferring tasks, operations, jobs or processes to an external workforce, hiring third parties for a specified period of time.

Companies often do this to reduce costs or improve efficiency. Outsourced functions can be performed by vendors onsite or remotely.

In simple words, outsourcing is the practice of obtaining goods and services from an outside provider.

It is mostly used in industries where there is a shortage of manpower for specific positions or where the cost of labor is very high. For example, software developers or designers.

Outsourcing can be used for any position, but today we see companies using it for non-core functions — those whose purpose is to support the company's core infrastructure or assist with day-to-day operations.

Why do companies outsource?

A company sometimes experiences growth at a rate it cannot support with its own in-house team.

To keep pace, one option is to hire a pre-trained workforce from specialist companies to perform activities as and where required without interrupting the flow of business.

In addition, outsourcing companies such as IT Folks provide employees with a high level of expertise to work in work teams, which frees up internal employees to take on other functions.

According to a US survey, 44% of companies outsource to reduce costs, 34% to gain access to resources unavailable internally, 31% to free up internal resources and 28% to improve business or customer focus.