As global demand increases, the advantages of outsourcing have become apparent. Outsourcing has become a means for businesses to stay ahead of the game. This can be helping businesses expand by building out new departments. Sometimes, it’s improving performance through faster and more efficient processes. It can even involve filling missing roles so that a business can gain a competitive advantage by adding to their array of services.
Whatever the case may be, outsourcing has allowed businesses to scale and handle a greater number of customers. Availability and cost-effectiveness as major advantages of outsourcing have made it a popular practice among small to large enterprises.
In this article, we will be discussing these and other advantages of outsourcing that you may not be aware of. Let’s get started.
1. Cost
Get expert-level skills while keeping costs down.
One of the biggest advantages of outsourcing is the expenses you can cut down on. Whether it’s hiring, training, equipment, software, or other operational costs, outsourcing can shave off some of those overheads.
You can think of outsourcing as renting a service, software, equipment, or entire department on an as needed basis. For instance, keeping on a full-time employee with a regular salary and benefits can be less economical than hiring an outsourced freelancer only when their skills are required.
In some countries, labor costs are lower due to the lower cost of living. This means that you can get the same standard of work quality for less than you would if you were to hire domestically.
2. Promotes Growth
Most businesses have a load of functions that are both repetitive and time-consuming. These types of tasks are a major drain on focus that should be spent on core functions. They are still important, but because of how much time they require, they can tend to hurt other vital areas. One of the top advantages of outsourcing is that it helps companies be better equipped to fill these needs without making sacrifices. In the end, it helps the business grow because the focus is restored to other areas. This means that the business can provide proper customer service, pull in more sales, and more.
Note that repetitive and time-consuming operations increase as a business grows. Think about paperwork and materials purchasing and appointment scheduling. It’s just part of how business works. As you grow, therefore, you are going to need more help to keep all these back-office tasks in check. You can, of course do what most other business do, which is pull people away from other tasks by assigning them this extra work. That will not help you grow. You might be looking at short-term savings, but ignoring the longer-term detrimental cost to the business. Don’t tie up expert human resources when you can outsource the extra work and avoid hurting core activities. Remember, these core activities are what make the business successful.
3. Save Time and Resources
Expertise
Hiring skilled people saves you a lot, even if it looks like it’s costing you more. Think of it like this. They paid for their own training and went through years of experience and education to get to where they are now. The price at which they market their service is much lower than all the years and money put into making them experts in their field. Now imagine having to put aside funds to go through that process to learn to do those tasks at a high level, or train someone to do the same.
Furthermore, the person you would have had to train outside of their skillset can immediately be launched elsewhere. Their efforts and skills can be used more effectively. When you look at it like that, you are getting great value out of outsourced services.
The time it takes to find an expert through outsourcing is much less than the time it takes to “grow” an expert or go through a tiring in-house recruitment and hiring process. With outsourcing, you don’t make the same levels of commitment that you do with employing people. There’s a lot more flexibility for you.
Infrastructure
It makes more sense to outsource a service for a specific operation rather than buying the space or equipment yourself. This goes hand in hand with hiring. Who’s going to operate the equipment if they aren’t trained? You not only save on expensive technology, but you also save on the resources it takes to get good at using it.
When you’re not worried about a large chunk of your budget going to operations outside your core tasks, you can allocate more money resources into key areas of your business that are crucial for profitability.
4. Efficacy
With years of experience and knowledge in respective spaces and specializations comes optimized and streamlined processes. A seasoned outsourcing company or independent freelancer will have tried and tested various solutions in the time they have been in business. They would understand what works best in general, what doesn’t, and the nuances in between, depending on the client business they work with.
This means that work gets done efficiently. They know how to maintain quality while bringing you results as fast as possible.
The more knowledge one possesses, the easier the work becomes. One of our favorite advantages of outsourcing is that it takes that pressure of accumulating knowledge off of you. The people you hire can handle the technical side of things and produce fast results. You, then, are free to go and do what you do best.
5. Productivity
When experienced professionals are helming your operations with efficient processes, an increase in productivity is soon to follow.
Additionally, another way to maximize productivity has to do with hiring based on time zones and working hours. You can hire someone who works the hours you are asleep and ensure that business keeps moving around the clock. You’re essentially doing twice the work while getting the rest you need to keep yourself in best form.
You can also hire someone who works some of the same hours as you do and maximize productivity through close, clear communication. This way, if they have any questions or need clarification on anything, there is still a window for that.
6. Risk Management
Outsourcing is not the easy way out that many business owners think it is. Yes, it does make things easier, but it’s not a cop-out. One of the least known advantages of outsourcing is what a strategic tool it can be. Outsourcing the right tasks actually helps you to minimize business risks. This has a lot to do with hiring experts instead of winging it in-house. You can leverage third-party vendors and agencies who add to your expertise with the top solutions they offer. And you get all these advantages without taking on any of the risks yourself. You don’t have to train anyone, for instance, and if you hire a freelancer, you don’t pay benefits, either.
7. Flexibility
As a business scales, you need a team that can scale with it. Outsourcing makes it possible to scale without losing momentum due to personnel constraints and waiting on the traditional hiring process.
A unique feature of outsourcing is its ability to allow businesses to expand temporarily to meet seasonal productivity demands. Not all companies are ready to manage full-on expansion. With outsourcing, you can take care of all your customers, and when the demand dies down, you can simply shrink back to normal size and hire again as needed.
8. Focus on Your Core Business
Being bogged down with time consuming menial tasks means you cannot focus on the central parts of your business operations. Outsourcing these tasks means you and your team members can focus your efforts and expertise on the main engine of your company.
For instance, you can hire people to handle the less crucial tasks of a bigger project while you tackle the most important aspects. Save hours by outsourcing repetitive and tedious but important tasks like lead generation, data entry, and bookkeeping. You can then focus on customer relations, brand awareness and reputation management, product creation, innovation, and other foundational processes that got your business to where it is today.
9. Larger Talent Pool
Aside from potentially higher labor costs, hiring domestic could mean limiting your options and missing out on international talent. Hiring from countries established or specialized in the services you need is smarter. You get to explore a range of options from a diverse and wide talent pool that is not available in your area.
High employee turnover rates are incredibly detrimental to business flow. However, a few outsourcing platforms and agencies have fast or no turnover guarantees. In the event that someone quits, you can get a replacement in no time. Even if you hire on your own, you can find a replacement quite quickly to either hold the position temporarily or take over long-term. You don’t need to worry about compromising quality with outsourced solutions, either. As long as you hire diligently, you actually increase your chances of finding a great fit precisely because, and this is another of the greatest advantages of outsourcing, the talent pool is much larger.
10. Simplify Project Management
When you outsource, you can actually keep everything more organized. This has a lot to do with the greater accountability mentioned previously. When people work in the same office, there’s a greater sense of ease because you can walk over to someone’s desk at any time to ask them something. With a workforce spread out over several cities and even countries, you have to be more cautious about staying on top of your game. That makes everyone take project management seriously.
Conclusion
When you outsource, there is an unspoken expectation of excellence. Mainly because outsourced work is not guaranteed on the side of the hire, individuals and outsourced teams work harder to please their clients. It is in their best interest to deliver outstanding results to maintain a good reputation in their space and maybe even earn the chance to continue working with the same client long term. This level of accountability makes outsourcing far less risky than it may appear.
Part of service excellence in the outsourcing world is something you won’t find in-house. Business functions are often unaffected because they are separate from your business. For instance, if you lost power or internet connectivity, you have the peace of mind knowing that your outsourced functions are still running as normal. You don’t have to move the whole office to a cafe, or worse, cancel the day.
