Outsourcing VS Insourcing. What Works Best in Australia?
Australia is among some of the most preferred countries of the world when it comes to the peoples choice of selecting a country which has good weather, friendly people and importantly a strong economy. Due to the nature of the articles topic, we want you to focus on the last point of the previous statement i.e. STRONG ECONOMY.
What does a strong economy indicate? A strong economy means that the citizens of the country are well paid and the circulation of money is highly fluid within the country. While that sounds great from a citizens perspective, it can sometimes become a challenge if you are starting out a business in that economy, why? Because the citizens of a strong economy have high living standards and the market needs to meet them by paying well, and that is not always ideal for a start-up, when they are trying to build their workforce. For this primary reason, along with many others, we have seen a huge trend of outsourcing in the modern day markets. People, particularly, from first world countries are frequently talking small repetitive tasks outside of their primary area of business into developing countries, where the cost of labour is much cheaper.
Outsourcing not only happens at country level, it can be just outside the company, where the objectives could be cost saving or higher than usual workload or simply the lack of workforce.
This trend of outsourcing is particularly prominent in the web design and digital department, where businesses from Australia, rather than using an expensive web design agency in Sydney or web design agency Australia, tend to outsource their digital media handling offshore to a country like India or Philippines where the web design work is done at a fraction of the cost or, the work goes out from with in the company to a local agency because the company does not need these services on a regular basis, does not have the capacity to support a full time staff or just has too much workload and it does not make economic sense to hire someone in house.
Now this sounds like a simple choice for the business, but it does have its pro’s and con’s.As price is not always the focal point in business, especially in aspects such as web design , social media marketing , web development , branding and advertising where these elements combine to make up the face of the business and are responsible for a good or bad impression in the consumers eye, businesses with higher budget and long term aims tend to opt for quality which comes at a higher price, just to build a solid foundation for their businesses to stand on.
Let us do a comparison of these pro’s and con’s and deduce what is the optimal choice. For our case we will usethe example of a business that needs to improve its digital presence and is now facing the choice between outsourcing or hiring.
Freelancer: (outsourcing internationally)
- No accountability
- No post production support
- Unclear market understanding
- Communication barriers
- No quality control
- Time zone barriers
- No compliance
Web Design Agency Sydney, Australia (outsourcing locally)
- Cost effective- Maybe a higher one-off but no need to pay after the project completion
- Have a better understanding of the local market in respect to their field
- Compliant with Australian regulations
- Understand the quality standards of the target market with a specialists eye
- Accountable for their actions, as they can be prosecuted for unprofessional behaviour
- Timely delivery
- No liability for consumer – You pay for the project and that’s it
- Connections and referrals opportunity to build business relationships
- A higher quality output
- No micro management
- No overheads
- Expensive to retain
- Comes with overheads
- Needs training
- Needs to be micro managed
- Work environment suitability
- Can resign amidst a project
- Easier to monitor performance
- Better control of resource
As we can see, there are good and bad sides of all the models. The right choice would depend on your particular scenario and the vision of the business owner. If you are startup that is bootstrapping the project you might be focusing on getting the most bang for your buck in which case an outsourced freelancer can be a good fit where you will get the services at a basic level for pennies but will have to spend a lot of time to explain what you want and will have no assurance of quality.
However, if you want to build a strong brand which has clear and concise communication with the target audience, such work requires a team of professional who do it to put bread and butter on the table. These people will charge you much higher than a freelancer but, the quality of work will speak to your audience in a way that they would want to continue their engagement with your brand which will result in much higher sales resulting in a considerably high Return on investment.
Now the last option of hiring a full time employee is a great choice if you’re quality focused. However, it is only sustainable in the case that you have a strong client base and your business is in a position where it is generating a constant stream of revenue, where client experience needs to be smooth and you want to be in control of what goes on in your business.
Now talking particularly about the Australian market, there is a huge trend of outsourcing domestically particularly in big businesses where they give out their day to day work just for the sake of convenience. We see some giant sized businesses outsourcing work frequently within the Australian market. This trend has given rise to some quality agencies particularly in the web design space.
The Sydney based web design agency “RUMORS” is a good example of one of these agencies. When you outsource your digital marketing and development services to dedicated and full service web design agency in Sydney like www.rumors.com.auyou can expect to receive a high quality of services which won’t break the bank. Rumors is a full service digital marketing agency in Sydney which provides highly targeted digital marketing campaigns, aesthetically pleasing and highly efficient web development services.
We hope this article was able to provide you some valuable insights regarding the trends of insourcing and outsourcing in the Australian market.