Insourcing is when you bring a project or job “back” to a person or department of your company that you had “outsourced” to someone else before. This does not necessarily mean that a project which is insourced is performed under a company’s roof. “Reshoring” in general means that something that was being completed in another country will be done in the country of the company’s origin. Insourcing can be for any project that is required. And, more in more it is making more business sense.
Insourcing can take many forms.
In the U.S., insourcing includes using any of a national or international company’s subsidiaries which are based in the States. This allows the subsidiaries to share in job creation, capital investment, import-exports, R&D and other crucial business needs. This type of insourcing also helps a company avoid the negative label of outsourcer by bringing work back within U.S. borders.
Insourcing can also be defined as using previous outsourced, third-party workers to work in house under direct supervision. These experts may work alone, serve as consultants or become project managers who find all the team members they require. As results come in, a company’s staff then implement and or follow the results or processes.
It may sound strange, but insourcing can also consist of bringing in foreign nationals with special skills not currently available (someone who speaks an obscure foreign language, for example). These persons can then be paid a lower wage than an outsourced source without penalty.
Economically, insourcing often improves the bottom line in several ways. In-house costs can be monitored and controlled more easily than those offshore. Communication is easier and less expensive. Wages that were once cheap are now rising in “third-world” countries. International prices for fuel, transportation, storage and shipping are rising too. And many of the costs of offshoring tend to be hidden at the start of a relationship and appear as a costly surprise later.
The integration of a skilled workforce locally can improve output in many ways. Some specifics are a smaller-idea-to-completion-to-revenue time. Bringing in experienced workers can cut down on training times also.