Preparing for the Cost of Outsourcing

Mike Donoghue is a member of a multinational information technology corporation where he collaborates on the communications guidelines and customer relationship strategies affecting the interactions with internal and external clients. He has analyzed, defined, designed and overseen processes for various engagements including product usability and customer satisfaction, best practice enterprise standardization, relationship/branding structures, and distribution effectiveness and direction. He has also established corporate library solutions to provide frameworks for sales, marketing, training, and support divisions.

  Outsourcing   Resource Management  

What is driving your outsourcing need? For many, it is the shortage of talent that pushes organizations to look elsewhere—not just out of region, state, county or district, but out of country and continent to find suitable work candidates.

When there are shortages in availability of these resources, costs also rise—and that means that there can be a bidding war for certain skill sets and a greater chance for a more volatile and less steady workforce. While some talented individuals and professions may generally garner higher compensation packages, corporations need to fill many positions that, no matter how great their abilities, cannot be accommodated for by a select few star performers.

If, however, you are chiefly looking to utilize outsourcing to save money, don’t be surprised by how much it may cost you to get the talent you need. Here are some of the expenses you may need to swallow in your efforts…

Currency Differences
If you are outsourcing on an international scale, you will need to review fluctuations in currency and how much it may vary between contract periods, not to mention paychecks. That development group you hired last year may have cost 2 million dollars then, but this year it may cost 3 million.

You may be able to gather information on these trends and determine just how much the pendulum will sway back and forth; however…

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