You have been promoted to management. You are now being tasked with working on a project to increase efficiency and reduce costs. Someone suggests possibly outsourcing some departments or divisions. You feel a pang of guilt as you feel that someone might end up losing their job over this decision.
Fear not – those times are behind us and now outsourcing is primarily used to quickly grow and expand your current company output. It is not about switching out a call center to a lower-cost region or hiring a development team at a fraction of the cost in your home country. Think of them as an additional support unit to allow you to keep on doing what you need to do.
They are qualified experts
Most outsourcing solutions are usually focused on a specific industry. You can outsource your accounting and payables to one company, outsource the development of a new app to another company, and outsource a big new marketing push to that snazzy and flashy marketing agency that works in that repurposed warehouse.
They are cost-friendly
There has been a shift from the days of old, where the outsourced teams were thought to be of a lower quality than hiring an employee locally. Nowadays – they are highly talented with years of experience and usually have at a minimum a bachelor's degree if not a master's degree. The major benefit is that outsourcing locations are based in lower-cost areas of the world, and thus cost a fraction of what you would normally pay per hour or year. In addition, those additional employer costs such as housing, taxes, benefits, and onboarding costs are not factored in with outsourcing. The option to staff internally requires resources throughout the employee lifecycle. There are recruitment and onboarding costs in the beginning. After being hired, there are equipment costs, salary + benefits and annual raises. Towards the end of an employee lifecycle, we have the exit interview and other additional hidden costs associated with turnover. Even with this new employee joining the team, and the benefit of the knowledge staying after the project is done, the cost to maintain that knowledge continues.
With an outsourced staffing solution, costs are known upfront. You pay them hourly, which includes a package of resources and equipment, and they can be assigned to a different department as needed after a project is done, continuing to save money!
Keep in mind that outsourcing does not always necessarily mean hiring an entire division per project but can also just mean hiring one contractor. This contractor can be treated similarly to an internal employee, managed by an internal manager, but again without all the costs associated with employment, just a fixed hourly rate.
They make your employees better
It not only provides empowerment to your new managerial role, but the teams can be managed by your internal staff, giving them the opportunity to not only successfully complete their work, but learn themselves how it would feel to not just to produce projects, but to manage people. Also – since these outsource teams are focused on a maximum of one or two areas, they are also a wealth of knowledge that can be shared to help your internal staff grow professionally.
They let businesses focus on business
Sometimes the business is small and didn't properly set up an accounting/finance department. This is the best way to have all that paperwork management go through an expert outsourcing company at the start, while the home base focuses on growing the business, and is not rushed to hire an entire finance department overnight. It is easy with outsourcing teams to decrease or increase the workflow monthly to suit the needs of the business and follow.
Do not fear the outsourcing team. They are there to do a specific task, or to be your ally in a department that might have been overlooked or is severely understaffed. They work for you and with you and usually also have expert customer account managers monitoring to ensure that you have the right staffing fulfillment needed.