Why thinking outsourcing doesn’t mean “in house” helps your competitors?

By Shaunvir Singh Jul 26, 2016

To be completely candid, a big problem that I see with a lot of small to medium sized entrepreneurs is that they are using a 20th century mindset in a 21st century world.

I am often at conferences/ networking events and inevitably people ask, “So what does your business do?” or, when someone tells me that they need to hire staff, I will go on to explain that my company provides remote staffing services from India and that if they need to hire an employee, we can help them.

Without fail, almost every time the response that I get is, “Oh no! We don’t want to outsource! We want to keep our work ‘in house’!” I then go on to explain that the service we provide is not outsourcing but, rather, we are providing an “in house” solution, albeit, one that is remote. My words almost always fall on deaf ears; it’s almost like I’m talking in another language! Business owners almost invariably look at me puzzled, as if to say “What on earth are you talking about? How can we hire an ‘in house’ employee if they are working half way around the world?!”

Well, that is exactly the point that so many small to medium sized enterprise entrepreneurs are missing out on. This mindset is an old mindset and one from the old world. But, we are now well and truly into the 21st century and the internet has changed the rules forever. Holding onto the old rules is an outdated and uncompetitive way of thinking. And one of the rules that the internet has changed is keeping your work ‘in house’ is no longer about where your work is done but, rather, how it is done.

And to prove this point, let’s think of it this way. Is an employee that works from home not an in-house employee? Of course they are, and no one would like to think otherwise. Another example is that of satellite offices. Say you have an office in New York and another branch office in L.A. If you were working from the former office while your colleague was based in the latter office, would your work not be “in house”? If a lack of geographical proximity does not preclude work being “in house” within a country, then why should it be any different if that lack of geographical proximity is stretched beyond the borders?

What makes a resource in-house is how you work with that person; what makes work in-house is whether you exert full project management control over that work. And, so, with the world now being flat, your in-house work can be literally located anywhere. To give a far-fetched example, even a person working for you on the Moon can, with modern technology, now be an ‘in-house’ employee.

But if this is the case why are so many SMEs stuck in their mindset? Why do SMEs have this way of thinking? Why do so many SMEs believe that to keep work “in house” it must be within their local office? I can only speculate but I think it is because, as discussed in the previous three blog posts, we think in terms of, and make decisions based on, emotion. And so we have an emotional attachment to seeing someone in front of us every day; seeing someone in our office every day working within the physical walls of our office makes us emotionally feel like they are in-house employees. Compare this to someone based, perhaps, thousands of miles away, in another country, who you have never met, and perhaps may never meet., It then becomes easy to understand how and why SMEs are stuck in this mindset that to be in-house you must be physically present within the four walls of your local office.

However, whilst I appreciate how easy it is for our emotions to influence our thinking, this does not deviate from the fact that continuing to think in this old mindset is a distinct disadvantage. Increasingly, more and more small to medium sized enterprises are operating from satellite offices within their country, and even looking for talent on a global scale. This is a huge competitive advantage to have over your competitors for numerous reasons. For now, however, I will just emphasis one key one.

As an entrepreneur myself, words cannot do justice to the impact even one loyal, hardworking and true team member makes to your company. One great team player can impact your business more than 10 mediocre colleagues put together, and that’s not an exaggeration; I’ve seen it many times myself. Accessing great talent is often the difference between success and failure in business. If you are going to restrict yourself to talent which is within a one or two-hour drive from your office, when more and more entrepreneurs are opening themselves up to talent from all four corners of the globe, then, without doubt, your competitors are going to have a huge advantage over you.

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