Outsourcing has been a business practice for generations. Modern outsourcing methods differ from years past due to technology. Businesses seeking a competitive edge found the Internet to be a boon for outsourcing projects. No longer did companies need to hire locally for many aspects of business operations. Value was found in hiring professionals from around the globe, many of which had the education and experience needed to fulfil project requirements, at a significant cost reduction.
Starting with intangibles such as administrative skills, outsourcing began expanding to include tangibles such as manufacturing. Although outsourcing projects to other areas of the world for a lower price had been done for decades, the rapidly expanding Internet allowed client companies to interact with contractors around the globe, quickly. Before the Internet, companies spent millions of dollars each year to communicate with, and visit in person with, heads of offshore companies. Now, it’s as easy as a phone call, without long-distance calls and air travel requirements.
Things have changed. In the past, the only way to find employment, for most individuals, was to be hired by a company near them. While relocated for a job was an option for some, the cost of doing so was prohibitive. Most companies didn’t consider offer relocation expenses for new hires unless they were mid- to upper-level management.
Now, more than ever, individuals can find steady employment as a remote worker, earning the same salary as before, significantly more in some cases, by working from home. Their jobs didn’t change, but how they got to work did. A decent computer and a steady Internet connection are all they need to ‘show up for work’ each day.
Companies are always looking for an inexpensive way to do business. For many enterprises, man-hours are a key factor in calculating overhead. Although outsourcing doesn’t eliminate labor costs, it does reduce it. Factor in employees eliminating the cost of commuting, paying for parking or tolls and buying clothes to adhere to a company’s dress code, and you’ll get the same employees for less. For example, a marketing account manager who saves $500 per month by not being forced to ‘go to the office’ every day will take a pay cut in order to work from home. He’ll save money, which transfers into remote employers saving money as well.
Contractors from less developed countries are bountiful. They normally have education and experience equitable to what companies are looking for, but for wages that severely undercut 1st world countries. Imagine being able to hire a software developer for 10% of the cost of hiring locally. Same education, same experience, but with significantly less overhead. Outsourcing is simply cost effective.
Imagine not paying matching contributions to the IRS, Medicare, etc. Imagine not dealing with unions. Imagine not being forced to pay for benefits for full-time employees (contractors). Imagine eliminating an entire department that deals with all the above. That’s the kind of tax breaks and other benefits you can expect by hiring outsource professionals.
The IRS 1099 saves everyone money – contractors and clients alike. Sure, you’re still liable for all the other taxes you need to pay. However, not paying matching contributions is a real boost to your capital cash flow.
Using outsourcing as an infrastructure resource saves you money, time and headaches. You can now hire an entire army of contractors without jumping through legal hoops to get there. Hire, pay the invoice, and you’re done. If you’re looking to expand your business but don’t have the budget to hire full-time employees and pay for everything, then outsourcing may be right for you.
Contact Sidago Integrates Solutions today for your free, no obligation consultation. We have many contractor areas to choose form. If you don’t see the type of contractor you need to run your business smoothly and cost effectively, tell us – we’ll find the right contractor for you. It couldn’t be any easier, or more cost effective.