Chart showing the Top Challenges of Outsourcing

Top Challenges of Outsourcing

Increased flexibility, adaptability, and cost-efficiency rank among the top outsourcing reasons for businesses. In fact, outsourcing has become such an integral part of business management that experts say it’s a market that’s set to be worth over $525 billion by 2030.

But despite the benefits it offers, there remain certain outsourcing problems that brands have to contend with.

So what are the challenges of outsourcing? Here’s a breakdown of companies’ top problems with outsourcing.

Top outsourcing problems brands face

A recent study on the challenges of outsourcing found that there are many different problems businesses face when thinking about hiring external contractors. The top issue is cost, with nearly one in four (23%) surveyed saying the high costs involved in outsourcing pose a barrier. It should then come as no surprise that affordable pricing is a factor businesses look out for when outsourcing work.

Interaction problems are also one of businesses’ top outsourcing challenges. More than one in five (21%) say that outsourced teams are difficult to communicate with. Incidentally, more than half (53%) of businesses that outsource work interact with their service providers every day. 38% do so on a weekly basis, while just 8% communicate with them once a month. The medium through which brands interact with external contractors can also affect how effective communication is. It may be interesting to note that 25% of brands that outsource choose to keep in touch via email, with another 25% doing so via video conference—the two most popular mediums.

This is followed by failure to meet deadlines and follow instructions, faced by 14% and 12% of brands as outsourcing challenges, respectively. Experts advise brands facing these issues to consider ironing out these potential problems before engaging the services of an external contractor. Having proper communication and setting clear expectations for deliverables can help to save a lot of time and energy.

Insufficient privacy and confidentiality also rank among the top outsourcing challenges for companies. 9% of businesses cite the lack of confidentiality as a problem, while 8% say data breach is an issue they face. To overcome these challenges, brands need to build a bulletproof security policy and take their time in vetting their service providers to ensure they’re trustworthy.

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