The Benefits of Hiring Remote Staff

Outsourcing involves the hiring of remote staff; or people who are located outside the confines of the company. The term “remote” connotes a location that is of considerable distance from high-activity or high-traffic areas.

In the context of outsourcing, remote staff means contracting people or service providers that are located in areas or regions where comparative cost advantages and economies of scale exist. Because the primary function of outsourcing is to reduce costs, the comparative cost advantage can be found in labor costs.

Benefits of outsourcing work to a remote team

Cost- We already made it clear that companies reduce costs from outsourcing based on compensation alone. A company can further streamline salaries if it outsources from Asian countries such as the Philippines and India where the average wage rate for outsourcing work is between AUD$3.50 to AUD$7.00. Assuming the company outsources the entire back-office operation; accounting, human resources, and Information Technology, the company would be able to generate more savings because of economies of scale. Service providers from India and the Philippines adjust the hourly rates based on the volume of work. If the campaign needs more people and runs longer hours, hourly rates may be adjusted because the volume of work is high.

Productivity– Although outsourcing utilizes people with significantly lower labor costs, it does not mean the quality of work or service rendered will be sub-standard. The adage, “you get what you pay for” does not hold true for outsourcing. In fact, outsourcing benefits small business owners greatly because now they can afford to hire people with highly technical skills. Unlike regular office employees who are paid a fixed salary per month regardless of the level of productivity, outsourced workers are only paid per productive hour. If your regular office employee takes coffee breaks, checks his social media status, or chats with fellow workers near the water cooler, you will have to pay them for those hours.

Optimization of Resources– When the world entered into a recession in 2008, companies needed to assess their situation and develop a strategy that would allow them to streamline costs without compromising productivity. Outsourcing was accepted as a cost management strategy but the recession highlighted its ability to contribute to productivity in two ways. First, it gave companies access to skilled talent who costs less, and second, by transferring departments that are tasked with non-essential work, the company can re-align or repurpose resources to core activities or those that are directly related to revenue generation.

Flexibility- By outsourcing skills from other parts of the world, companies can also take advantage of time zone differentials and ensure operations and other key areas of responsibilities are managed 24/7.

By implementing outsourcing solutions in their business strategy, companies can exponentially improve productivity by reducing costs and improving revenue generation.