Some of the main advantages of a decision to do outsource are:

1. Focus on core competencies

With outsourcing, companies can focus on their core-business. This can be done by renewing the strategy and restructure the resources that exist.

The company will get benefit by focusing these resources to meet customer needs, by diverting supporting work outside the core-business company to the outsourcing vendor and focus existing resources fully on the strategic work that directly related to customer satisfaction or increase in corporate earnings.

If your company is manufacturing or service company, is not it better for you to focus on your core-business making high-quality products or services that can satisfy market demands, rather than spending limited resources to handle the company’s labor issues?

2. Savings and operational cost control

One of the main reasons for outsourcing is the opportunity to reduce and control operating costs. The company that manages its own human resources will have a financing structure that is greater than the company that left the management of its human resources outsourcing to vendors. This happens because the outsourcing vendor plays with the “economics of scale” (large-scale economies) in managing human resources.

Similarly, manufacturing companies, more products are produced, the smaller the per-product cost incurred. For vendors of outsourcing, more and more human resources are managed, the smaller the per-person cost also incurred.

In addition, because of labor problems is the core-business, efficiency in managing human resources outsourcing vendor is a major concern.

By shifting employment issues to the vendor outsourcing, companies can make cost savings by removing the budget for various investments in the areas of employment, including reducing the human resources required to perform activities of labor administration. This course will reduce corporate costs overhead and funds saved can be used for other projects directly related to improving the quality of products / services.

For most companies, HR is generally fixed costs. When the company experienced positive growth, this would not be problematic. But when growth is negative, this would greatly burden the company’s finances. By shifting the provision and management of human resources who work outside the core-business company to the outsourcing vendor, the company can control HR costs by converting fixed costs into variable costs, where the number of human resources tailored to the needs of core-business companies.

The importance of controlling HR costs can we see today. The crisis caused by the fragility and economic uncertainties and global political cause corporate earnings continued to decline. This is exacerbated by the emergence of new competitors that make the market competition becomes unhealthy.

This situation led to companies both large and small struggling to survive by doing massive layoffs to reduce the fixed cost that generally is the range of 60-70% of the total cost of routine.

Have you ever done? These massive layoffs actually are avoided if the company can optimize its human resources to work on core-business course and divert human resources who work outside the core-business company to the outsourcing vendor.

3. Utilizing outsourcing vendor competence

Because of its core-business in services provision and management of human resources, outsourcing vendors have the resources and capabilities better than the companies in this field. This ability is gained through their experience in providing and managing human resources for various companies.

When cooperating with professional outsourcing vendors, the company will get benefit by utilizing the expertise of the outsourcing vendor to provide and manage the human resources needed by the company.

For small companies, start-up companies or companies with poor human resources department in terms of number and capability, outsourcing vendors can greatly contribute to the company. Because if not handled properly, it can cause problems of human resources management and substantial losses for the company, even in some cases threaten the existence of the company.

4. Companies become leaner and more agile in responding to market

Every company, large or small, must have limited resources. With outsourcing, companies can divert limited resources from jobs that are non-core and no direct effect to earnings and profits of the company to work core-business strategically that can ultimately improve customer satisfaction, revenue and corporate profits.

If done properly, outsourcing can make the company become leaner and more agile in responding to market needs. The speed of this market respond becomes a competitive of the company compared to competitors.

After outsourcing, some companies can even reduce significantly the number of their employees because many of their routine work become irrelevant.