If you’re interested in a lower wage bill, fire your employees and recruit remote contractors from overseas instead… Of course I’m kidding. This is the most common perception of outsourcing. Have you ever felt a need to outsource or delegate tasks?
Since the 90s, crop tops and outsourced services have been the rage. Why? Well the former has its roots in layers I’m not yet quite equipped to delve in, but the latter, let’s talk about that for a bit. Apple does it, Nike does it, even Deloitte admits to outsourcing 31% of their IT services. A 2019 survey conducted by YouGov revealed that 70% of British businesses have outsourced core services including; IT, payroll, printing and accounting. So why do they do it? What is it anyway?
According to Oxford Languages, to outsource is to obtain goods or a service by contract from an outside supplier. Some add that these goods/services could have been offered by your current employees.
The global outsourcing market has literally doubled in less than 20 years. From $45.6 billion in 2000 to $92.5 billion as of 2019 and the numbers keep going up; so much so that this was one of Former President Donald Trump’s main agendas. He urged companies to stop but I guess no one was listening. This is like telling them to spend more for less with no clear rewards. What he was asking, is right next to impossible in the arena of the space-time continuum.
Okay, let’s see what’s so good about outsourcing that no one seems to want to let it go and why you should specifically outsource these four key areas:
- Marketing
- IT Management
- Accounting
- Shipping and Logistics
Reduced Costs:
This will be achieved in many ways:
- Hiring a marketing, shipping and logistics, accounting and IT team as permanent staff is so expensive, especially for a business that’s still struggling to establish itself. These are among the most expensive departments to run with high salaries and daily expenditure especially in the shipping and logistics sector. So if you’re trying to save that coin, you’re better off outsourcing.
- We’re living in a time when things are constantly changing, and the cost of keeping your employees up to date with current trends and practices may be higher than outsourcing service providers; who are dedicated to delivering the best services at decent prices.
- Lower overheads will be experienced with less office space needed, warehouse requirements can be curbed to nil and there is no need to buy the relevant equipment/software to run operations.
Highly Skilled Personnel:
Outsourcing offers an endless pool of the exact talent/skill you need. The benefit of outsourcing is that sometimes you need a temporary problem solved by a highly skilled individual e.g managing your business website, for companies that don’t heavily rely on shipping and logistics, a big marketing project or coming up with a new financial structure or just general financial consultations. If need be, the outsourced service provider can even help train your employees at a lower cost and in less time than if they went for classes or were left to learn for themselves over time. Outsourcing ensures you get the latest cutting edge technology, skills and resources for much less of a learning curve.
Increases Focus:
Your team needs to keep doing what they’re really good at doing. So what do you do when you have something else that needs to be done? You guessed it! Outsource. This is some form of automation, where you team won’t be distracted by numerous tasks and can thus focus on driving profits into the business.
Mitigates Risks:
There has been no scarier word than “risk”, in my opinion, and I know I’m not alone. Outsourcing allows you to share the risks involved with your service provider. Considering your outsourced man power is more often than not, more conversant with the issue at hand. They are capable of minimizing these risks and delivering in a way that may even avoid any losses.
Less Stress:
Need I say this? The peace garnered is unimaginable. You literally throw the problem over to a more qualified entity and rest easy knowing that your problem will be solved in the best way possible. If that doesn’t call for action to outsource, I don’t know what will.
New Market Base:
You can view outsourcing as a form of partnering. Your new “partner” may expose you to new markets either by default or favor. They can also widen your scope and make you think of venturing into market areas that you hadn’t thought of before. For example, by outsourcing from an area that is not your own, you may discover that it’s cheaper to operate in this new area or that the market over there is more willing to buy into your brand.
Fresh Ideas:
“There is safety in a multitude of counsellors” Different people have different perspectives and an outsourced team could add value in the area of ideas as well. You may feel stuck as a company, trying to solve a problem and everyone has reached their wit’s end then boom! Just like that, someone from the outsourced team sees things in a new way that helps keep the ball rolling.
Compliance Requirements:
Don’t you just hate them? We need them though and we certainly can’t go around them. Rather than tire your employees with these, outsource a team that will be able to meet these requirements with much less head scratching.
Longer working hours:
24-hr global economy, here we come! Outsourcing is an excellent way to keep your business from sleeping, especially when you outsource from a different time zone. You can keep your business running 24/7 all year round while still offering your employees ample rest.
There are many ways you can keep track of your outsourced work. Communication as they say in all things is key. It’s even more key when outsourcing. Keep the lines clear and open between you the business and the service provider as well as within your company to make sure you’re all on the same page regarding the process, and that you’re all happy with the progress. The executive should remain strong and consistent all through in supporting the work and ensuring that quality is delivered to avoid disappointments.
Nice script
Thanks Faith.