Remote Insourcing vs Outsourcing: Comparison of Models
Remote insourcing is gaining popularity as one of the newest trends in how businesses hire workers. Insourcing and outsourcing are not new topics to the business world. Outsourcing software development services emerged as an effective way to hire workers, while cutting costs, in the 1980s. The business strategy allows organizations to contract out major work to specialized service providers not hired as part of the internal staff. As decision makers began to understand the advantages of outsourcing, much of their employees’ workload was lifted as off-site professionals took on many of the tasks that were traditionally completed in-house.
Since the rise of outsourcing, businesses everywhere have continued to develop new methods of hiring workers. Keeping with the latest trends in society, and looking for ways to deliver the highest productivity at the lowest costs, work models have changed greatly over time. Remote work is a popular means of hiring qualified employees while saving money on infrastructure today. Given the fact that the “millennial” generation is thought to be the driving force in the popularity of remote work, many people believe that working remotely is a new concept. Remote work was initially developed in the 1970s in SoHo, New York and referred to as “live/work.”
The latest trends in remote work predict that at least half of people will be working remotely by 2020. A 2016 study performed through surveys by Gallup indicated that 43% of Americans performed all or part of their work from home. This was a jump from 2012 where the surveys indicated that only 39% of Americans worked, in some capacity, remotely.
While outsourcing has remained a popular option for businesses to reduce operating costs and open doors to additional talent, some major corporations started to shift back towards the insourcing strategy. Businesses like the successful General Electric were looking to have more control over their workers and the quality of the work they put out. In the late 2000s, they began moving from outsourcing to insourcing. Bringing work back to the states and under their control. But for businesses who didn’t have as much money to invest, still followed the pattern of outsourcing and outstaffing.
Remote Insourcing Gains Popularity in Web Developers Profession
The benefits of insourcing versus outsourcing is a common debate that sways back and forth depending on what profession you are discussing. It is through this debate that companies began opening to the idea of remote insourcing. When you break it down, the model combines the advantages of outsourcing insourcing. Remote insourcing offers the benefit of cost efficiency with the most unified cooperation of an in-house team.
Remote insourcing delivers an increased satisfaction with project goals without the overhaul of an infrastructure to house your team. Unlike outsourcing, the remote employee or team works directly with the in-house staff as if they were actual employees of the company. It is very much like outstaffing, where employees work on all projects assigned in their department rather than being hired on a one-time project basis.
The outstaffing model has been particularly successful in the industry of information technology. Businesses hire a dedicated development team to work all their projects without having to pay benefits or provide office space. The success of the outstaffing model is due, in part, to the ability to hire developers from other countries who often have more experience and talent than what is available locally. When you bring in a team from another country to work exclusively on your development projects it can be considered a means of offshore insourcing. With these models proving to be an effective and efficient way to reach project goals, what does that mean for outsourcing?
Will Outsourcing Continue?
Outsourcing is a strategic decision that has been used for years to hire third party professionals for specific tasks or projects. The decision to outsourcing is generally based on the lack of resources a company has in-house. Local talent, skills of professionals, and availability of experts are all reasons why a company might outsource. But, one of the most gratifying advantages of outsourcing is its cost efficiency. Outsourcing has long been a means to get the right people to complete a project or task.
Opposite of outstaffing, hiring dedicated teams, or remote insourcing, most outsourcing is focused on project-based work. Although remote insourcing has become a means of hiring that many businesses are shifting towards, outsourcing is expected to remain on the upwards spectrum in the future. That’s because businesses and projects based on product development, sales, and marketing continue to see the benefits of the work model.
Remote Insourcing vs Outsourcing
When looking to find the best model for your business, it’s important to compare all your options. The following table is a comparison of remote insourcing vs outsourcing:
It is easy to see the differences between remote insourcing and outsourcing. The best option for your business may not be the right option for another business. Since there are many options when it comes to choosing a work model, it’s best to look at all the pros and cons of each. Although remote insourcing is its own work model, there are many elements of simple insourcing that help make the decision to choose this model obvious. There are many forms of remote work, and most businesses can customize their remote work to fit there needs. So, for many businesses, looking at insourcing and outsourcing advantages and disadvantages helps to make the decision clear.
Advantages of Insourcing and Outsourcing
Some businesses simply abide by the commitment to keep their business in-house. Others vow to find the most cost-efficient option and choose to outsource their work. For those who are open to the options available, here’s a closer look at the advantages of each.
Insourcing advantages include:
- Better monitoring of workers
- Ease of calling last minute meetings
- Better buy-ins for employees
- Opportunity for learning and growing as a team
- Better communication
- Insider view of the inner workings of the business
- Long-term investment through encouragement of employee growth
- Increase solidarity
The advantages of outsourcing include:
- Reduction in costs
- Online collaboration tools to post and manage projects
- Simple onboarding process
- Access to global talent pool
- Increased business operations because of time zone factors and holiday schedules
- Guaranteed work continuation with no time down since time off isn’t a required benefit
How Remote Work Plays into Insourcing
If you have chosen to insource your work, you still have options. In-house insourcing involves an employee’s physical presence in your office. If you need something from them, you can walk over to their desk and ask. With remote insourcing, you still have access to your employees, but it has limitations compared to in-house insourcing. Still, compared to outsourcing, both work models give you the control needed to collaborate with your team, set expectations, and monitor progress.
The benefits of remote work, however, are often too good to give up. At the top of the list of advantages, is the cost savings. The costs of outsourcing are much lower than insourcing because of many factors. With outsourcing, you will save on employee benefits costs such as paid time off and insurance. While outsourcing is a less expensive hiring option, following an outstaffing model can lead to even more savings. That’s because the outstaffing model helps save on administrative costs such as rent, utilities, and equipment. In-sourcing can be more than four times the cost of hiring an outstaffed development team. With developers making anywhere from $60-150 an hour plus paid time off and benefits, hiring IT professionals in-house is no longer the popular choice.
Reasons Consider Mobilunity as an Option to Insource
While you can weigh the pros and cons, the advantages and disadvantages, the costs and savings, at some point you need to decide which model is best for your company. Based on the data, it’s safe to say that remote insourcing has an advantage to outsourcing. You still get the costs savings that makes outsourcing so appealing. But, you also get more control, better security, and a long-term working relationship that can be of great benefit to your business.
At Mobilunity, our dedicated development teams offer all the advantages of the remote insourcing model for your information technology needs. When you work with our developers, you’ll get:
- Expert professionals at your fingertips
- High-quality work at lowered costs
- Transparent work processes
- Collaboration and timely updates
- Complete focus and dedication to your project
- On-time deliveries that meet project goals
As a decision maker, you want to deliver the best results for your business. When you combine remote insourcing with a team of professionals you can trust, the sky is not the limit when it comes to your business growth.