Virtual Assistants

Top 11 Outsourcing Risks & How to Overcome Them

We can talk at length (and have!) about the advantages and benefits of outsourcing. But what about outsourcing risks? 

a happy man and woman high-fiving in front of a laptop

Outsourcing is not without its downsides. We at Outsource School aim to provide honest answers. We also want to give you a complete picture of what your outsourcing journey can look like. So that’s what we are going to do in this post. 

We’re going to get into the most common risks associated with outsourcing. These are barriers that make most people hesitant to go down this road. While these may be very real stumbling blocks, we won’t leave you without hope! 

We’re also going to share some helpful tips and guidelines to mitigate these risks. By the end we hope you’ll have a clearer picture of the track ahead of you and the right routine to help you run through it. 

Risks of Outsourcing

1. Loss of Control

Almost any business owner can relate to this feeling. A business can feel like your baby. It’s hard to give even a little control to someone else. This is especially true if that someone lives in a different state or several miles away from you! 

The procedures and methods used to care for that business task or process might not be to your liking. There may not necessarily even be anything wrong with the way they do things. However, outsourcing means you have less opportunity to keep an eye on every single detail. If you are a meticulous person who wants to be intricately involved, outsourcing may not be an attractive solution. 

2. Communication Barriers

A smiling woman wearing headphones looking at a laptop screen and waving and talking about outsourcing risks

Ever read an email, chat, or text message and completely misread the tone? Ever got a call from a relative but their network connection was choppy and you could only catch a few sentences? 

Or have you ever visited a country where they speak a different native language from yours? Maybe you tried buying something or asking a question and it took a while before you came to an understanding.

Well, these situations are not uncommon to the outsourcing experience. 

Virtual meetings have gotten better, but you can’t always guarantee a stable connection on their end. Sometimes English is their second language, and it’s hard to get the point across clearly. 

Slow response times can be one of the risks of outsourcing that is most frustrating. Sometimes there are communication delays because of the time difference and the project gets held back. You might end up pushing deadlines, losing face, or worse, losing a client.

3. Cultural Differences

Sometimes communication barriers are a cultural thing. This can be cultural literally in terms of the country or region or in terms of company or business culture. 

Some countries are very straightforward in their communication, which may sound rude to those who have a different cultural style. Some may have customs that affect how they interact with those younger or older than them. Others might give short answers without elaborating unless asked specific questions. Some might solve problems from a different angle than you. 

This sort of stuff can lead to frustration even though you are trying to solve the same problem. 

Some outsourcing companies may also have different company cultures than yours. You might value getting work done earlier than the deadline. You might do this to account for any potential errors, improvements, or other changes. However, the outsourcing company might not have that same value and give it to you on the deadline. (Which is late in your books.) 

This can lead to culture shock and adjusting can take time, effort, and other resources.

4. Difficult to Find the Perfect Fit

Two women talking to each other over a video call about outsourcing risks

Outsourcing can sometimes feel like shopping for a pair of pants. You take your measurements and even bring a good fitting pair along with you to compare. When you get there, you may find that they have different sizing mechanics, different materials, or wrong proportions. Maybe everything fits right in terms of size, but the pants don’t have back pockets. (And you REALLY like back pockets!) You may just need to go to a different store or look at a different brand.

The fact of the matter is this. Unless you build it from the ground up, piece by piece, it won’t be exactly what you’re looking for. It’s very rare that an outsourcing solution will meet every requirement or preference without making an effort.

You need to be ready to make a few adjustments here and there. Sometimes it’s your expectations that need adjusting!

5. Privacy and Security Concerns

This is probably one of the most alarming outsourcing risks and why a lot of people remain hesitant. Let’s be frank. The risk for data leakage from within your business is never 0. That number gets higher when you allow third parties access to company information. You must simply take greater care to restrict access. Make sure you can trust people before you give them greater power.

6. Lack of Experience with Remote Teams

Managing a virtual team poses unique challenges. You need to think about:

  • Remote onboarding
  • Communication channels
  • Virtual project management 
  • Performance monitoring
  • Payroll

If you don’t have the experience to manage remote teams well, you could end up with more problems

These can be a lot to think about. To the uninitiated, this could easily overwhelm and discourage them from trying outsourcing.

7. Transition Challenges

When giving the reins over from in-house to third party hands, you need to evaluate the outsourcing benefits and risks. It’s true you might be freeing yourself and your team from that task. However, a change of management is pretty major. 

Not only do you have to consider onboarding, but also the rate at which you hand tasks over. For instance, say you’re moving personnel over to another area of operation. That transition can be difficult to manage, especially if you aren’t sure the third party will deliver. 

8. Failure to Deliver or Constant Delays

A woman holding her head in her hands while looking at a laptop screen thinking about outsourcing risks

That brings us to this point. While this is one of the easier outsourcing risks to mitigate, it’s still a fear that holds people back.

We already talked about communication delays. However, there are other possible factors that could delay delivery including:

  • Equipment malfunction or breakdown 
  • Natural disasters
  • New regulations in the country of the outsourcing company

Other possibilities could simply be a lack of professionalism or an overstatement of their ability to deliver. 

9. Quality of the Outsourced Product

Quality control measures are much harder to implement, maintain, and monitor when you outsource. This is doubly true if you outsource internationally. Unless you have a trial run or they have sample work output to show, all you have is their word. Of course, you can set up a trial period and see how it goes. You would have to do a probation period anyway for anyone you hire, overseas or not.

10. Geolocation Issues

This refers to problems related to a person’s physical location. For instance, the freelancer could live in an area prone to flooding and landslides. This can cause frequent power outages or network connectivity issues. The time zone itself might be an issue if you don’t  talk about what time of day you expect them to be available. Make sure you know the conditions before you commit to working together.

11. Intellectual Property Concerns

This is similar to our point on privacy and security. Your patents might be protected, but other processes and trade secrets might not be. Companies and individuals alike could create copies and sell your ideas. They can do shady things that fall in the gap between what is infringement and fair use. To be fair, this can happen with anyone you hire, from anywhere. Hiring overseas just means it’s harder for you to catch them and take steps to prosecute.

How to Manage Risks When Outsourcing

A woman working on a laptop and thinking.

All these risks may seem intimidating, but don’t worry! Below are some practical ways you can mitigate these risks. Most of them are really simple adjustments, too. You just need to get used to the new environments that outsourcing opens you up to. Then you can take the steps to stay insulated.

1. Thorough Selection

Do. Your. Research. Better yet, only hire from reputable agencies and platforms. Then do your due diligence among the candidates there. This way, you have a hiring partner who can guarantee a safer experience.

You can avoid staring in the next outsourcing horror story by simply taking the time to explore your options. Check the candidates’ reputations. Take advantage of social proof like ratings, reviews, and comments. 

2. Setting Clear Expectations

When you’ve done screenings before you get into the interviews, make sure the job description is clear. List your roles, responsibilities, goals, objectives and everything related to the tasks and process. It’s better to over explain than to under explain. When you know exactly what you need, you’ll get a better idea of what you want out of a hire.

3. Spotting Red Flags

While researching and interviewing, check to see if there are any alarming reviews or behaviors. Check to see if their answers are consistent with what they say on other channels like their website or socials.

4. Regular Communication

Check in with your remote team regularly. Make sure to set up clear communication channels and guidelines. From as early as the interview, ensure that your expectations are understood.

5. Performance Monitoring

These check-ins can serve as your progress checks also. You can also use project tracking and management software. You can use this software to communicate with your team, assign tasks, monitor deadlines, and make sure everything is running smoothly. 

6. Data Security Measures

Have them sign legal documents that protect your data, such as an NDA (non-disclosure agreement). Keep sensitive data close to the chest. Operate on a “need-to-know” basis. Do this and you’ll more likely avoid outsourcing risks related to data leaking or other related fraudulent behavior.

7. Building Relationships

This is an important step that many can overlook. This includes building relationships with other businesses and your outsourcing partner. 

With business partners, you can ask their advice and recommendations on outsourcing companies. 

With the outsourcing company, it’s all about trying to find partners and not just workers. When you treat outsourced staff like your own, they are more likely to treat your business the same. 

Don’t forget to conduct temperature checks even with outsourced staff. An unhappy worker will not be putting their best foot forward.

8. Building Your Company Culture and Values They Share

It’s so crucial to build a healthy, collaborative culture between in-house and outsourced staff. This is one of the best ways to mitigate outsourcing risks. 

One helpful tip is to look at their mission and vision statements, values, and objectives. This gives you an initial idea if you would work well together based on what you deem to be important. 

9. Proper Management

This is true both on your end and on the end of the third-party service provider. Your experience with outsourcing benefits and risks really depends on how well project managers handle relationships and projects as a whole. 

If you don’t have experience managing an outsourced project, you have options:

  • ask people who have experience for advice
  • hire a manager
  • train someone
  • rely on your outsourcing partner to help you out

Outsourcing Strategies

The three main outsourcing strategies are onshoring, nearshoring, and offshoring. You can learn more about them by clicking that link. Basically, onshoring is hiring a company from the same country as your business. Nearshoring and offshoring involve hiring from outside your locale and internationally.

What Is Outsource School?

outsource school

Outsource School helps you to unlock the potential of virtual assistants and accelerate your business growth.

This is the exact system Outsource School’s founders, Nathan Hirsch and Connor Gillivan, used to go from zero to 8 figures and 40+ virtual assistants with an exit in 2019.

Since being founded in 2020, Outsource School has helped 1,000+ business owners hire 2,000+ virtual assistants for their companies.

Schedule a free sales call to learn more

Free resources you might like: 


And that’s our outsourcing risk list! 

Our goal for this article was to help give you the routines and practices you need to outsource successfully. We hope we helped give you the legs you need to jump these hurdles with ease. Now, onwards toward crossing that finish line to business success! 

Virtual Assistants

Insourcing vs Outsourcing: Pros, Cons, Examples, & Things to Know


insourcing vs outsourcing

If you’re one of those people who wonders whether insourcing vs outsourcing is better, you’re not alone! We get this question a lot, even from business owners who have tried both before. In fact, we wondered this ourselves way back when we first started running businesses! 

In this post, we are pleased to present the major insourcing vs outsourcing pros and cons. We’ll name them, give you some examples, and drop a few tips, too. This way, you can start your hiring journey off on the right foot. Spoiler Alert! When you know how to make good hiring decisions, you can succeed with either strategy. 

What is Insourcing?

Insourcing has two main meanings in the business world today. 

One meaning is looking for people from within your organization to do a task or fill a role. This entails either adding responsibilities to an existing role, promoting someone to a new position, or moving someone to a different role. 

The other major meaning is hiring someone to work in-house to accomplish a certain job. This entails getting someone new, not currently employed at your company, ready to work within your office. 

Advantages of Insourcing

When you insource, you can benefit from knowing the people you are assigning a project to. In many cases, they have been with you for a while, so you know what they can realistically do. You won’t have to spend any time testing out their skills on paper. The only step would be holding an onboarding meeting to get them integrated into the new role. You also know how they work – their attitudes and the hiring soft skills you already vetted them for. You know they’re a culture fit, so they can get straight to work.

In addition, insourcing vs outsourcing gives you a way to incentivize working with your company. You can present promotion tiers for those who stay on long-term. You can also offer flexibility and growth opportunities for stellar performance. 

Disadvantages of Insourcing

Insourcing by pulling people from existing roles or adding to these roles can be stressful. The people you are moving or tasking can find the changes to be burdensome. You can avoid this by making sure that they are not only willing and able but happy to do the new tasks. Incentivization is a powerful tool in combination with proper performance evaluation.

A man with a 80/20 mug reading a magazine article about business success.

What is Outsourcing?

Outsourcing means looking outside your company for someone to do a certain function for your business. There are two main ways to do this.

You can outsource on your own, which means hiring an agency or individual directly. You can also choose to hire an outsourcing company to provide third-party services.

Outsourcing is our favorite way to bring specialized skills and knowledge into our businesses. That is, if we don’t already have them in-house, or want more affordable options. Hiring overseas is a great way to expand hours in a cost-effective manner while not sacrificing quality. 

Advantages of Outsourcing

Whether you hire freelance contractors directly or hire an agency, you can benefit. Because freelancers are business owners and agencies have track records, you can access both greater expertise and broader experience. Outsourcing vs insourcing also opens you up to a much wider talent pool. You can find experts in areas that are not available in your locale. You can also hire experts overseas who you wouldn’t be able to afford locally.

Disadvantages of Outsourcing

Outsourcing vs insourcing has its risks, like not having as much control as with someone working in the office next to yours. Being virtual in nature most of the time, outsourcing is also associated with higher rates of data leaks. These can be avoided, however, with the proper protocols and safeties in place. 

For some businesses, like manufacturing operations overseas, the disadvantage is the great distance you must travel to do quality checks. But you can outsource even this, and we actually recommend it, especially when you don’t speak the language. For the most part, however, businesses hire VAs.

A man looking at a large Apple computer monitor reading about insourcing vs outsourcing

Differences between Insourcing and Outsourcing

Insourcing vs outsourcing is not all that different, but we’ll clarify a few vital distinctions here. For the areas that can be a problem for you, we know some workarounds. That way, you can ensure the greatest advantages and limit the disadvantages.

Types of activities that can be delegated

The main difference of outsourcing vs insourcing is simply what tasks you can’t do over the internet. Everything else can be outsourced to anywhere in the world with internet connections that are fast and stable enough. These days, we have so many online tools that were not available before, so it keeps getting easier. 

Scalability and flexibility

When you hire in-house, you generally need to sign contracts that guarantee employee benefits. This includes insurance, social security, and termination clauses. With online freelancers, you can hire and let go without any restrictions. You also do not need to pay benefits of any kind. They even pay for their own overhead! This means that outsourcing can cover your changing needs better than any in-house deal.

Quality Control Capabilities

Outsourcing has gained a reputation for instability. We think this is a matter of perspective and taking responsibility. 

In terms of worker instability, we like to call this flexibility. If you benefit from someone who will work whenever you want, you have to accept the caveat. They may not always be available because you can’t expect them to sit around waiting for you to call. However, you can always plan and book them in advance. Alternatively, you can look for someone else. The online pool is so great that you can find multiple people for most tasks quite easily.

When you talk about quality control, this is always the responsibility of the company. The leader must set the example and the expectations. Insourcing vs outsourcing is the same when it comes to checks and balances. It’s only the implementation that changes. For example, an in-office worker would get a visual inspection and an outsourced hire would have monitoring software installed. 

Five yellow stars representing quality.

Cost for the company

Outsourcing is much more affordable than insourcing. Mainly, this is due to location. Hiring from less developed countries gives you an instant minimum wage advantage. When you hire from outsourcing companies or agencies, you can also get bulk discounts. This works great for bigger teams like corporate customer service. It also works for several individuals across different departments all hired from one company.

Knowledge sharing

Sharing information used to be difficult when working with overseas hires. Today, however, we use the internet even for in-house communications. This means that there’s hardly any difference. 

If you want to get detailed, you could say that clarifications are easier with in-house persons. Yes, but actually meeting face to face is usually unnecessary. We would further argue that the online tools we have today are more advanced than ever. This is mostly because of the outsourcing needs that pushed for innovation. With such advancements specifically geared towards online work, outsourcing starts looking like the better option, all other things being equal.

Security risks

The security of your data can be poor whether you have someone working next to you or across the oceans. It all boils down to the safeguards that you have in place on their devices. Of course, we have to admit that hiring overseas makes it harder for you to prosecute. It really doesn’t have to come to that, through, if you’re careful.

A man on a video call talking about insourcing vs outsourcing

How to decide: Outsource vs Insource?

We’ve scattered some tips throughout, but here are some additional ones. 

Stage of company

When you’re just starting out, hiring a full staff complement may not be feasible. Even if you have the founding to do it, it’s not generally wise to do so. Hiring freelancers makes a lot better business sense because of the flexibility. As your business adjust and grows, the hiring strategies can flow along with the changes.

Speed of delivery

Hiring in-house tends to be a much longer process than outsourcing to a freelancer. The process of recruiting and doing up contracts alone can take months. Outsourcing gives you so many more people to choose from, and you can do everything online. This means you can find someone faster and get them working sooner. 

Industry standard requirements

If you need to meet certain industry standards or follow local laws, insourcing may be your best bet. Foreign individuals and companies, no matter their experience, may not know the local ins and outs. Sometimes you can find a company that specializes in the area you need work in, but it’s not common. 

Most often, hiring locally will give you the best chance of getting things done right. For example, you need a local lawyer because of government licensing requirements. You can hire an assistant overseas to help with paperwork, though. You also need a local accountant because they know the updated regulations that your business must comply with. Then you can hire a virtual bookkeeper to prepare the books and other documentation for them. This setup saves on time and money and increases quality.

What Is Outsource School?

outsource school

Outsource School helps you to unlock the potential of virtual assistants and accelerate your business growth.

This is the exact system Outsource School’s founders, Nathan Hirsch and Connor Gillivan, used to go from zero to 8 figures and 40+ virtual assistants with an exit in 2019.

Since being founded in 2020, Outsource School has helped 1,000+ business owners hire 2,000+ virtual assistants for their companies.

Schedule a free sales call to learn more

Free resources you might like: 


We hope that our explanation of the main insourcing vs outsourcing pros and cons helps you! If you need more help to determine which option is best for you, schedule a call! We’ll be happy to discuss your needs and assist on your hiring journey.