Outsourcing is a big word. Today, small and medium-sized businesses increasingly outsource some of their work processes. It may be cleaning, accounting, finding and hiring the necessary candidate or implementing the work for the customer, which is more profitable for the company to outsource than to do on their own. This leaves us with a key question in the year 2022 when there are a number of tools a company can use to speed up growth:
Is outsourcing the fastest way to grow your company?
Firstly, let’s remind ourselves why outsourcing is done in the first place.
There are, of course, a lot of reasons why. Sometimes entire business processes are outsourced, such as sales. Most often in such cases we are talking about fairly simple and straightforward processes that do not require highly skilled professionals. It does reduce costs and gives companies the opportunity to increase their turnover. Nevertheless, this type of outsourcing is more like “pedaling harder and faster” or “buying two bicycles instead of one” instead of getting into a car and moving forward at a completely different pace.
So why doesn’t this kind of outsourcing bring quality growth?
The answer lies on the surface – because the “head” of the company has not changed, and we are not talking about the director but the managerial staff of the company. These are the people who built the company and brought it to the level of development that it is at now. To change them is sometimes not possible, or necessary, and this is absolutely correct, the value of the company is in its team – in its people.
Of course it is possible to take a risk and eventually replace the entire management team, but the risk is sometimes too high. And then the company’s strategy turns into “professional growth of staff”: trainings, books, studies and other theories that eventually potentially produce a result.
A key issue lies in the choice of task or department that is outsourced.
Under no circumstances should you outsource tasks that directly affect the development of your business and relate to the key competencies of your team.
Experts also argue that you should never outsource advertising and marketing to anyone, no matter how long it takes you. There are many tools and strategies, as well as marketers. And those that will work specifically in your case are few. You will have to sort it out on your own, often by trial and error. But it’s worth it.
Usually companies understand which tasks these are, but if they don’t, it could mean the downfall of the business should they choose to go the way of outsourcing. This is the golden rule to follow.
Now, let’s take a look at the advantages of outsourcing and why it is used to grow your company in 2022.
Reduced labor costs. The hiring company doesn’t have to pay for outsourced employee training, buy equipment and software, and spend money on incentive support and bonuses.
Getting rid of social obligations. Company-outsourcer pays for sick leave and vacations by itself, and sends deductions to the tax, pension fund and medical insurance fund.
Independence from circumstances. As part of the contract, the outsourcer undertakes to provide services on time. Work will be done on time, even if freelancers quit, fall ill, go on maternity leave or vacation.
Improving the quality of non-core services. The customer gets access to the intellectual capital of an experienced, highly specialized organization and professionals who know their business.
Focus on the core business of the company. Resources required to manage non-core processes are reduced, while at the same time freeing up additional time and resources for the HR team.)
Does this also relate to management positions?
My answer is yes, you can and should outsource a top manager, and it’s a great practice because:
The outsourced top manager actually does the work of the top with the hands of your “native” manager.
They give you suitable and ready-to-use tools and helps you implement them, again with the hands of your company manager, which greatly reduces the resistance of the team, makes implementation quick and gives you quick results.
It’s also much cheaper than keeping the top on a full-time basis.
… But which spheres benefit from outsourcing the most?
The answer is IT outsourcing. IT companies use outsourcing for three core reasons:
As you review the different types and models of outsourcing, you’ve probably already realized that this approach to work provides a high level of flexibility. Outsourcing allows you to provide multiple competent solutions and bring experts to the project without having to include them on staff. This means more flexibility in the use of resources and the ability to substitute members of your team depending on the needs of the project at the time.
If you decide to take advantage of IT outsourcing, you can cut costs significantly. Mainly because you will then avoid the need to allocate funds to maintaining your own staff. Depending on the IT outsourcing model you choose, you can also save a considerable amount of money on infrastructure, labor costs, and software and tools. Outsourcing providers also guarantee a certain level of knowledge and experience in technical staff, which means you can cut costs when it comes to hiring and onboarding. It’s often these two processes that can generate the majority of your employment costs, as well as slow down your business growth.
Access to knowledge and skills
Continuing on the topic of finding employees, it’s worth noting that it can sometimes be too difficult to find the right employees in your area of residence. Especially when it comes to the software development industry, where the competition in the market is very high, and in some cases it can take months to find an employee with the necessary experience. Outsourcing provides access to competent experts who meet your needs, and an intermediary company takes care of finding them. You can also get the opportunity to hire people who are far away from you. In other words, if there are no experts of the appropriate level of competence in your region, you can find them somewhere else in the world.
Is your company considering outsourcing to grow your company in 2022? Let us know in the comments.