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When is Outsourcing Right for Your China Company?

"If you want something done right, do it yourself." It's a well-worn business maxim, underscoring the belief that no one cares for your business as much as you do. But what happens when managing a thriving, growing business becomes too overwhelming? The challenge of overseeing expansion is a good problem to have, but you can't be everywhere at once. So, how do you get more manpower on board?

One obvious route is to hire additional staff. However, another option is to consider which parts of your operation you could outsource. Outsourcing is increasingly popular, allowing you to delegate work and focus on what truly matters. But if done improperly, or if your suppliers fail to deliver, you risk damaging your reputation and business.

What is Outsourcing?

Outsourcing involves paying another organization to handle part of your work. There are four key reasons for outsourcing: to save time, to expand resources, to reduce costs, or to gain expertise not available in-house.

Pros of Outsourcing for Your Chinese Company

Cost Efficiency: Outsourcing can be more cost-effective, providing the same job at a lower price. This global trend means more competition in the outsourcing industry, often resulting in reduced costs.

Access to Talent: Outsourcing opens up a larger talent pool. Locally, your hiring options may be limited, but outsourcing allows you to tap into global expertise.

Simplified Recruitment: Outsourcing eliminates the need for onboarding new employees. Partnering with an existing organization means no team fit issues or benefits packages to manage.

Increased Focus: Outsourcing routine tasks frees you to focus on core activities and innovation, transferring procedural burdens out of your organization.

Specialized Expertise: If your organization lacks certain skills, outsourcing lets you leverage the expertise, resources, and know-how of specialized providers.

Language & Cultural Fit: For businesses in China needing Chinese-language support, outsourcing to a provider proficient in the language and culture can be invaluable.

Cons of Outsourcing

Hidden Costs: While outsourcing can be cheaper, it may come at the expense of quality. Outsourced staff may be less motivated, potentially affecting performance and requiring a careful balance between cost and quality.

Talent Pool Issues: A larger talent pool doesn't always mean better choices. Local expertise and a deep understanding of your industry can sometimes outweigh the benefits of a broader, but distant, talent pool.

Employee Commitment: Outsourced teams may lack the devotion and commitment of in-house staff. For critical areas like customer service and client rapport, in-house teams may be more effective.

Making Outsourcing Work for Your Chinese Company

Outsourcing should offer tangible benefits for your business and reputation. According to Deloitte’s 2016 Global Outsourcing Survey, cost-cutting is the top reason firms outsource, followed by a focus on core business activities. Here are three key takeaways for successful outsourcing:

Invest Time Initially: Ensure your outsourcing relationships generate value by investing time in the initial stages.

Strategic Advantage: While cost savings are crucial, achieving a strategic advantage and maintaining a good reputation with suppliers is equally important.

Strong Processes: Establish robust processes for transition and governance with your suppliers to ensure smooth operations.

Outsourcing can be beneficial, but it’s essential to choose a partner who understands and respects your business goals. Establish clear rules and expectations, maintain constant communication, and build in contingency plans.

By following these guidelines, you can harness the power of outsourcing to support your Chinese company’s growth and success.

Can Woodburn help you?

 

Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.


Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.

 

Talk to an expert


Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.

Topics we can advise on include:

  • Company Registration

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  • Tax & Audit Services

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  • Visa Application

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Our calls are automatically scheduled via Zoom - or via Teams, WeChat or WhatsApp upon direct request. 

Our advisory calls are available from Monday-Friday from 8am to 5pm CEST and Wednesday until 9pm CEST.

 


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Woodburn Accountants & Advisors is one of China and Hong Kong’s
most trusted business setup advisory firms

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