Is outsourcing basically just an admission that your company or department is incapable of performing a task? The answer can often be yes and no. But this is not necessarily a negative situation. In fact, many times outsourcing is an excellent option and less expensive than hiring full-time staff. Especially when considering the real cost of advertising, professional recruitment fees, training, benefits packages, payroll taxes, bonuses, incentive programs, employee turnover, etc. Not to mention the frustration, wasted time and expense if the new hire doesn't work out and must be terminated.
Like it or not, you also end up paying full-time employees for unproductive activities such as e-mailing, chatting with coworkers, browsing the Internet, non-business telephone calls, fiddling with their computer when it isn't working correctly, etc. You also pay for down time when an employee is a good one, but isn't being fully utilized. Consultants are only paid for time spent on specific, well-defined tasks.
Below are examples illustrating circumstances that naturally lend themselves to outsourcing:
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