5 Risks of Outsourcing and How You Could Deal With Them

5 Risks of Outsourcing and How You Could Deal With Them
8 minutes

When you're used to doing everything for your business on your own, the idea of outsourcing can be incredibly daunting. How can you find reliable contractors? How do you know you can trust them with your business tasks? And how can they possibly do things as well as you can? All of these fears are valid, and there are risks of outsourcing. Everyone wants to scale their business and continue to grow. To do that, though, most people have to start off-loading some of their more tedious and time-consuming tasks.

What you're trying to do here is save time, not make more work for yourself. And let's be honest, posting jobs, conducting interviews, onboarding staff, and doing trials can be extremely time-consuming, not to mention risky.

What if you put in the energy to hire someone, and it doesn't work out? If you use a service like Wing Assistant, you get the benefits of full-time employees with a lower amount of risk. You tell us the tasks you want to outsource, and we match you with an experienced, dedicated assistant who can take care of them.

Regardless of how you go about outsourcing work, there will always be some risks. But there are ways that you can minimize and manage the most common ones.

risks of outsourcing: 1 - miscommunication; 2 - bloated budget; 3 - delays; 4 - security threats; 5 - inexperience

Risks of Outsourcing #1: Miscommunications

One of the most significant risks of outsourcing work is a breakdown of communication. After all, when you were completing all your business tasks yourself, you didn't need to report back or communicate with anyone. Not having effective communication with your assistant from the start will lead to dissatisfaction for both parties.

Managing Miscommunications

By establishing ground rules and making communication strategies clear, you can save a lot of headaches down the line.

Provide business hours

You may not be running a "traditional" business, where staff works in an office 9-5, but that doesn't mean you shouldn't have business hours. Don't expect to be able to reach your assistant 24/7. You wouldn’t want them trying to contact you in the middle of the night either.

Business hours will dictate when you will be available and online to communicate with each other and hold you both accountable. They can ask you during business hours if they have a question and know you'll respond right away. Similarly, if you need to jump on a call with them to discuss a project, you know they will be available during that set time frame.

Set norms for communication

Get clear on how you will communicate with those you outsource work to. Pick a format and stick to it. You can use Slack, email, Discord, Microsoft teams, or directly in your chosen project management software. The method you choose to communicate is up to you, but make sure that everyone is on the same page. If you have messages coming in from multiple different streams, then you'll be more likely to miss something.

Have procedures for escalating concerns

It may take some time for your employees to get familiar with the tasks you've assigned them, but soon everything will be running like a well-oiled machine. In the meantime, there could be concerns on both sides. Maybe you feel the assistant is under-performing, or they may feel that they aren't receiving the support they need. Either way, you'll need a procedure for escalating concerns so that everything is done in a professional and organized manner, allowing you to deal with problems effectively. For example, you can create an escalation form that can be filled out anytime there is an issue.

Brief the provider or set the context

No employee can do their job if they aren't told how to do it properly. Don't assume that they will just pick up where you left off and perform to your standard. Be hyper-specific when creating briefs and explaining tasks. And have your new hire repeat this back to you to ensure they understand.

Risks of Outsourcing #2: Bloated budget

You know that it will cost you money to start outsourcing work, but it's also going to enable you to make more. That said, the last thing you want is a bloated budget where you end up spending way more than you anticipated on outsourced work. Regularly spending more than what you thought you would is unsustainable in business.

Managing your budget

Getting your finances in order is one of the most important parts of keeping a business afloat. Here’s how you can avoid one of the biggest risks of outsourcing.

Define the project requirements

If you want to avoid hidden costs and stay within budget, you need to get specific about your project requirements. Make a thorough breakdown of the deliverables required, including even the smallest sub-tasks (even better if you can provide an approximate amount of time that you would allow for the tasks). This way, you'll receive an accurate quote for the project and know exactly what you'll spend ahead of time.

Find out if the provider has the right equipment

Another surprise you don't want to get is finding out you've hired a provider who doesn't have the right tools, equipment, or technology needed to complete the tasks. You might hire someone based on their hourly wage, which fits your budget. But then you have to spend more to purchase the software they need to do the job. For example, maybe you hire someone to edit copy for you, but they don't have Grammarly Premium. They will likely want you to cover that cost.

That's not to say that providers are expected to cover the costs for these specialized tools themselves; it's just something to be aware of so you can build it into your budget.

Risks of Outsourcing #3: Plenty of delays

When you start outsourcing work, you become a manager by default. Although you'll have freelancers, contractors, or employees completing tasks, you will still need to manage the timeline of these tasks and ensure that everything stays on track.

How to streamline project development

Your new hires will be looking to you for accountability, motivation, and guidance. Maintaining control and empowering third-party providers is the ultimate goal.

Set goals for the provider

One of the first things to do when developing a new project is to set goals for your provider. Having tangible goals in place will enable you to measure your provider's success easily and determine precisely where they are at in each project. You can build these goals into a project management software like Asana, Trello, or ClickUp, where you can check in on their status without wasting time communicating back and forth.

Track key performance indicators

KPIs are crucial for measuring your providers' performance against your goals. They help you to understand how you're benefiting from outsourcing tasks and ensure that the investment is worth it for your business. Key performance indicators also motivate your contractors by giving them specific targets to reach and keeping them on track. An example of a KPI you could set for your assistant might be to respond to all chatbot inquiries within 24 hours or something similar.

Set timelines for meetings

Meetings are points when you and your providers can check in to discuss project requirements, tasks, and progress. Set timelines for meetings as soon as you begin outsourcing tasks so that you and your providers can plan ahead and come prepared with questions, updates, and feedback.

Risks of Outsourcing #4: Security threats

Other significant risks of outsourcing involve business security. Online businesses should be proactive about protecting themselves online, since malicious actors have a wide array of tools at their disposal.

When you're operating your business on your own, you're the only one who has access to sensitive business information and passwords to accounts. You're solely responsible for your cybersecurity protection and have ultimate control over the management of all your accounts and information.

Preventing security risks

When you hire someone, you will inevitably need to provide them with access to accounts such as software tools, email accounts, and maybe the backend of your website. But you can work to mitigate cyber threats by following some of these steps:

Educate providers in basic cybersecurity

Your providers may not be cybersecurity experts, but that doesn't mean they can't learn. There are obvious threats to consider, such as phishing scams and social engineering attacks. Provide your new hires with resources as part of the onboarding process where they can read about the basics of cybersecurity and how to identify red flags. Talk them through common cybersecurity issues that you may have encountered in your business in the past so that they are prepared if one comes up again.

Limit providers' access to critical information

Don't give unlimited access to all your business's critical information. Only provide your staff with access to the information they need to complete their tasks. Leave sensitive documents or information password-protected so that only you can access them. Whenever possible, set permissions within tools or software platforms so your providers can't mess around in anything they aren't supposed to.

You might have to do a full audit of your systems and storage before onboarding new staff to ensure you've hidden things like payroll records or tax information before giving them access. Also, don't forget to disable privileges entirely if they stop working with your business.

Ask providers to sign a non-disclosure agreement

Another way to protect yourself from the risks of outsourcing is by getting the law on your side. Always cover yourself by having all new providers sign a non-disclosure agreement. An NDA is a legal document that ensures your business information is protected and kept confidential by your providers. If a provider violates the NDA, they can be legally penalized.

You can include any information that you deem confidential in your non-disclosure agreement. That is totally up to you. But make sure that it's super clear so that nothing is misunderstood. For example, are providers allowed to discuss the work they do for you with other potential employers? Or is it okay if they are transparent about their work; you just don't want them sharing your sales data?

Having providers sign an NDA will give you peace of mind that all your information is secure and confidential.

Risks of Outsourcing #5: Lack of experience

If you are in the process of growing your business and just beginning to outsource work, then it's unlikely that you have a huge budget to hire talent. That means that you may not have access to top-tier talent and could be working with more entry-level providers.

Managing lack of experience in providers

That's not to say that less experienced assistants still can't do a good job; you may just need to provide them with more guidance. While lack of experience in providers is one of the risks of outsourcing, it is also a huge opportunity for growth.

Specify how they could improve

If your providers are underperforming and not meeting your standards, don't assume that they will just figure it out or fix things independently. No one sets out to do a lousy job, but providers won't know what they are doing wrong unless you tell them. Instead of getting frustrated with them and saying their work is no good, specify exactly how they could improve. Say, "instead of doing things this way, you could try doing it like this" or something similar. This will save both you and your provider time and help them complete work to your expected standard.

Appreciate great effort

When your provider goes above and beyond or does a great job on a task, tell them! We all want to feel that our hard work is appreciated, and it helps boost overall morale. Once you've got a great service provider, you want them to stick around. Showing appreciation for your employees is one of the best ways to increase retention and ensure they continue working with you.

Have check-ins regularly

Schedule regular check-ins with your providers to make sure that everyone is happy and on the same page. Give your providers space to voice any concerns, ask any questions, and let you know how they are feeling about the work overall. You can also use these check-ins to give them feedback on their work, discuss future projects, or let them know about progression opportunities.

Manage the risks of outsourcing by working with trusted providers

Using all these tips and tricks, you can help mitigate the most common risks associated with outsourcing work. The key is working with a reputable provider that you can trust and who you feel confident can handle the tasks you assign them.

There will always be an element of uncertainty when hiring providers on freelancer websites like Upwork, Fiver, or Freelancer.com, which is why your best bet is Wing. Have access to a managed, trained, and dedicated assistant who is vetted and ready to complete all your business tasks. Get started with a Wing Assistant today!