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When Is Outsourcing Not Good for Your Business

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In 2019, the outsourcing industry was worth $92.5 billion. That is incredibly huge! 

Four years later, we can only guess how much this industry has grown. The COVID-19 pandemic showed everyone just how important remote work can be. The outsourcing industry has grown tremendously, and the future projection is very promising.

It has come to appoint where you can outsource any job, even that of looking for remote workers. If you need a specialist, just outsource the job of headhunting to an IT staffing agency. They can help you find a person with the right skills.  

While the outsourcing business booms, no one talks about its flip side. It has a downside.  

Keep reading to see the times when outsourcing is not good for your business. 

When you cannot retain control over the project

Outsourcing is a bad idea when you have delicate IT projects, and you need to maintain a close check on everything. 

When you have been contracted to do an industry changer kind of project, you will not feel comfortable assigning the task to a programmer, or developer who is based in another continent. 

Even when you sign non-disclosure agreements with the outsourcing company, the danger of losing control over the project is so real.

If the outsourcing company denies you access to files and data, you should replace them, or bring the project back so that your in-house team can do it. Be sure to include a clause about this in the contract. 

When your clients have said you cannot outsource

If the contract with your client says that you cannot outsource this work to another company or contractor, that’s that. Check for such a clause in the contract, it means they expect you to do all the work in-house.

Don’t violate the contract by outsourcing any or all of the work, you are going to risk losing the contract if your client finds out. They can also deny you more work in the future. 

If you have a good relationship with an outsourcing company, and you feel they can help you execute a project fast, you should discuss that before signing the contract. 

When outsourcing costs too much money

Outsourcing does not save money always. For example, if you are outsourcing jobs that require specialized skills, finding the right person is costly. And even when you find the person, they charge highly. 

In such scenarios, outsourcing ends up costing too much money, thereby being counterproductive. 

But first, why do small and medium businesses outsource some works? By assigning the work to a remote team, you do not have to buy more equipment, create more space to have more work stations, pay retirement benefits, and other things. 

There is also another way that outsourcing can cost more money when looking for a highly specialized professional

Recruiting such a person costs a lot of money because such people can be hard to find. The urgency of the job compels you to hire a recruitment agency. The recruitment process can be costly. 

When your consumers don’t like it

The core objective of any business is to make the customers happy so that they can come again. 

When outsourcing is not helping you to meet this objective, perhaps it is time to scrape it altogether. 

If your customers are from continental America, they might not take too kindly if anytime they contact customer support they get a representative speaking in a strange accent. 

For instance, if they are served by a person from India, Africa, or elsewhere apart from their home country, they might start thinking that your business is not American. 

Most feel betrayed that the company they have all along believed to be fully American is not. Disgruntled customers don’t come back, and this costs you money.  

Don’t outsource jobs that require customers to share their identifiable information. If a job requires someone to disclose their health information, and other sensitive details, it is better done where you can keep a close eye on things. 

When you risk losing your in-house team

Do not outsource all software development jobs, programming, copywriting, website design, customer care and big data jobs. Only outsource when your in-house team is overwhelmed or when there is need for specialist knowledge that your team lacks. 

If you start outsourcing everything, you will build the reputation of a company that outsources all jobs. This will cause your employees to start feeling threatened. They will think their jobs are at stake.


Outsourcing will save your business good money most of the time. But it might not always be good for your customers and clients? 

Reassure your employees that their jobs are secure. Let them know that once the work load reduces, everything will come back in-house. 

Finally, do not outsource jobs that have any factor of security risk. When you outsource sensitive projects, you put the data of your clients under serious threat. You do not know what the contractor does with the data they collect.