3 Good Things and 3 Bad Things About Working in Outsourcing Companies

I have spent nearly my entire career of 15+ years working for companies that provide professional services or outsourcing. Early on, I looked for roles in these types of organizations because the variety of projects would contribute to my professional growth.

If you are not yet familiar with the term "outsourcing" in the IT industry, allow me to briefly explain it.

It is a company that provides IT services to other businesses, where their main revenue comes from selling professional expertise and workforce capacity rather than their own products. The primary business of this kind of company is delivering IT services to clients where the teams work on multiple client projects, the structure of the team being project-based. What is also important to know is that the revenue model is based on billable hours or fixed-price contract.

Now that we have outlined the key aspects of outsourcing, let's discuss some of the advantages and disadvantages of working in this environment. The insights I'll share below are based on over 15 years of experience in various companies that sell professional services and expertise in the IT industry.

Good thing #1: Technical diversity

Outsourcing companies offer numerous opportunities for individuals looking to expand their skill sets and gain exposure to various business domains and technologies. These companies facilitate business relationships across multiple sectors, allowing you to work with a diverse range of tech stacks. Depending on the company's policies, you may have the opportunity to participate in various projects, which can lead to significant career growth and skill diversification.

Additionally, exposure to different businesses and industries, such as healthcare, banking, and finance, can broaden your problem-solving abilities. By tackling the unique challenges presented by each project, you can enhance your capacity to address a variety of business problems.

Bad thing #1: Project ownership

Many companies claim to work as partners with those they provide services to, but this is only sometimes the reality. As a professional services provider, you often need more input regarding project ownership. This limitation extends to product strategy, roadmaps, and the ability to influence long-term technical decisions.

The project's owners ultimately make the critical technical and direction-related decisions. While they may consult you as an outsourcing company to gather your opinions, the final decision rests with them.

From my years of observation, it's clear that individuals from outsourcing companies often feel a disconnect from the end product due to their limited ownership. While this isn't a universal sentiment, many view their work primarily as a job—a transaction of their skills and time. Consequently, they may not fully invest in the product's values, knowing they could be reassigned to a different project at any moment.

One of the most daunting aspects of outsourcing is the abrupt, often unforeseeable nature of project changes. These shifts can occur without any prior warning, leaving you with little influence over the situation.

Additionally, you may be constrained by the client's technology choices, limiting your ability to address fundamental architectural issues. Dealing with poorly documented legacy systems can exacerbate the situation, leading to significant challenges.

Good thing #2: Client-facing experience

This is particularly important in management positions, as I have observed. It enables you to develop strong communication skills, as you often become the intermediary between your company and the client. Additionally, it helps you enhance your stakeholder management abilities, given the numerous discussions about what needs to be delivered and when.

Bad thing #2: Career path considerations

If you choose to work for outsourcing companies, you may be perceived as a generalist rather than a specialist. This is essentially the other side of the coin when it comes to having technical diversity. If you find yourself frequently switching between various tech stacks and technologies, it can contribute to this generalist perception. It's important to consider this aspect before agreeing to move from one project to another.

Additionally, your career development could be impacted by the presence of multiple layers of management in an outsourcing company, as there is often a hierarchy involving both your company and the client.

There may also be times when you feel like an "outsider" to the client teams, especially if you do not have your own team within the company that employed you and are instead working directly with the client’s teams.

Good thing #3: Career resilience

Working for an outsourcing company can provide a flexible work environment, making you less vulnerable to the success or failure of a single product. This is particularly true if the company serves diverse clients rather than relying on just one or two. Additionally, it is easier to switch projects if one becomes problematic, which enhances adaptability.

Another essential thing to remember is that having multiple client relationships means more future opportunities for you if you decide to pursue a career in consultancy, for example.

Bad thing #3: Professional development

An outsourcing company that provides talent to a variety of clients needs to establish its own identity. It should have a strategic plan at the company level to support employees and create an environment where they can thrive and develop both professionally and personally.

In my experience across different contexts, I have noticed that training often takes a backseat to billable hours. In these situations, billable hours are prioritized when deciding how to use time. While this approach is understandable in an outsourcing company, employees who wish to enhance their skills should be able to pursue training. Ideally, employers should prioritize their employees' well-being over just focusing on billable hours; however, it is important to recognize that business needs ultimately come first.

Learning objectives should be aligned with project requirements rather than solely driven by personal interests, which also makes sense.

It's crucial to remember also that client budgets can significantly limit opportunities for innovation. When time equates to money, there is often less time available for thorough technical research and innovation. This highlights the importance of strategic planning and the efficient use of resources.

I hope I've provided you with a balanced and well-documented list of pros and cons to assist you in deciding on your next career step.

⭐⭐⭐ If you're seeking free advice or someone to discuss career development and ways to improve or make changes, feel free to connect with me on LinkedIn. Don't hesitate to reach out—I'd love to hear from you!