Mention outsourcing to in-house employees, and you might be met with stress and trepidation. If you are thinking about taking this step for your business, communication with in-house talent is vital, both to alleviate your employees’ concerns and to make the transition a smooth one.
There are some common misconceptions about outsourcing that can lead to unwarranted fears on the part of employees. For example, outsourcing is often confused with off-shoring, which involves the sourcing of low-cost labor, typically from another country where the cost of living is much lower. Outsourcing is simply using out-of-house providers to fulfill some business operations. While some companies do turn to offshore markets when outsourcing business functions, this is not always the case.
Open communication with your employees will help clarify issues and misconceptions. In a European poll by Coleman Parkes, commissioned by Logica CMG, 200 employees whose positions were outsourced were interviewed before, during and after the process, and 91 percent said that after the process was fully explained, they realized most of their fears had been unfounded.
Communication about the process should be initiated as early as possible after the decision to outsource has been made, explaining to employees what to expect during the transition, exactly how it will affect them, and how their roles will change. Employees should also be given ample opportunity to voice their questions and concerns and have them adequately addressed. Many companies find it helpful to enlist the aid of an outside work council organization. In fact, 82 percent of the employees surveyed said that having such a representative body played an important role in the process.
Companies who do not adequately communicate about planned outsourcing may risk losing valued employees; 29 percent of poll participants said they would seriously consider finding another job if the processes was not handled effectively.
In Europe, companies are required to offer employees whose jobs are outsourced a position with the same conditions they enjoyed in their previous role. US employers might do well to follow this model, considering that, although 84 percent of those surveyed felt apprehensive prior to the transition, about 70 percent were actually more satisfied with the new position for which they were trained, and 49 percent said they viewed the change as an opportunity to add to their skill set.
When considering a new strategy for your business, it is wise to do a little research to find out what experiences other companies have had in implementing the same strategy. If you are thinking of outsourcing some of your key activities, for example, an in-depth survey by Pricewaterhouse Coopers offers valuable insights into the subject of outsourcing. What were their findings?
Many businesses rely heavily on the ability to outsource certain operations to quality providers. For your business to run smoothly, it’s important to maintain a good relationship with your vendors. Part of the responsibility for smooth business relations lies with the vendor, of course. 
The federal government offers $400 billion in contracts annually to small business owners and vendors that can meet a specific need. Many small businesses can grow rapidly if they are able to obtain these federal contracts. In fact, many small businesses establish themselves with the goal of providing services uniquely to the federal government. However, getting federal contracts often requires a good bit of effort and knowledge that can take small business owners time to acquire.
What will your business be worth in three years? The sophisticated