The exact cost of outsourcing cost can be difficult to determine. There are many factors to take into account, including what services you’ll want outsourced, the size of your business, how quickly you need the tasks completed, and much more. As a result, a clear-cut price is almost impossible to determine. However, here is some basic knowledge you should know about the costs of outsourcing.
The Outsourcing Company
When you’re looking to outsource, there are countless companies available that can handle a wide variety of services, from HR to networking to advertising. One thing to consider when trying to choose an outsourcing company is the way the outsourcing company works. Does it have similar business practices and a great mission statement? If your firm isn’t compatible, you may end up paying more as you search for another group to handle your services.
Second, you need to be sure that the outsourcing firm is reputable. When it comes to outsourcing, reputability may end up costing more, but it will also prevent costly issues in the long run. Not only should your information be secure with the company, but the services should always be completed correctly the first time as well.
The Services
Because outsourcing services can vary considerably, this means that the price is nearly impossible to determine. Each firm will have a different price breakdown for different tasks you may need completed.
For example, human resource services are generally handled one of two ways. Most outsourcing companies will provide you with a fixed fee or a per employee per month price. On the other hand, some businesses choose to rate as a percentage of each employee’s individual monthly salary. If you prefer the first method, you can expect to pay anywhere from $20 to $200 per employee per month. As you can see, the price can vary quite a bit. With the second method, you can expect to pay anywhere from 2% to 10% of each employee’s annual salary.
There are ways to add services “a la carte”-style, and most outsourcing companies will work with you to determine what you need and how much you’re willing to pay for the services. Additionally, you should know that the larger your business, the more you will be expected to pay.
The Hidden Costs
One of the most difficult things about outsourcing is the hidden costs that come with the services. When you outsource a service, you’ll have to sign a contract stating how much you'll pay, when it is to be paid, and what you’ll receive for the sum. Unfortunately, if the contract isn’t clearly understood, you may not get exactly what you need, or the contract will allow the outsourcing company to charge more for services that are not explicitly stated within the contract. The hidden fees of outsourcing can make the whole process more complicated.
For example, if a company chooses to have services completed overseas, it has to take currency exchange into account. The amount quoted one day may be completely different the next, meaning $10,000 can quickly turn into $15,000.
