Companies typically save around 15% due to cost reductions brought about from outsourcing. claims one client saved 31% over one year when outsourcing one aspect of its business process. Deloitte's 2014 global outsourcing survey interviewed respondents from over 22 industry sectors and 30 countries.
HR is one of the noncore functions of a firm; other companies may have experts to help with this aspect of human capital.
As many as 16% of companies outsource some kind of task that deals directly with human resources. Signing contracts with other companies may take time and extra effort from a firm's legal team.
Alternatively, businesses may decide to outsource bookkeeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant.
In addition to cost savings, companies can employ an outsourcing strategy to focus on core aspects of a business.
Outsourcing noncore activities can improve efficiency, streamlining and productivity because another entity performs these smaller tasks better than the firm itself.
This strategy may also lead to faster turnaround times, increased competitiveness within an industry and the cutting of overall operational costs.
Security threats occur if another party has access to a company's confidential information and then the party suffers a data breach.
A lack of communication between the company and the outsourced provider may occur, which could delay the completion of projects.
Businesses can reduce labor costs significantly by outsourcing certain tasks, while companies may simultaneously have access to technology without investing large amounts of money to own the technology.
Many businesses find outsourcing the functions of human resources, such as payroll and health insurance, saves enormous amounts of time, effort and energy.