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What Is Outsourcing?



Outsourcing is when a company contracts with an outside provider for services or other business processes, rather than employing staff to do these services in-house. These services may be provided on-site or off-site. Typically outsourcing is done with an eye toward efficiency and cost-saving for the company. Outsourcing could be as simple as hiring a freelancer to edit a company newsletter or as large-scale as hiring an outsourcing company to handle all accounting and payroll functions.

Outsourcing can be when a company directly hires an independent contractor to a provide service. Or a company may hire an outsourcing company that either employs or contracts with workers to provide the services.

An outsourcing company may send workers to its client's workplace or provide the workspace. Sometimes outsourcing companies practice homeshoring by hiring home-based workers, or they may practice offshoring, by contracting outside the client’s country for the services.

Also Known As: subcontracting, BPO
Alternate Spellings: out sourcing, out-sourcing
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