Many entrepreneurs are familiar with the concept of outsourcing, which is the practice of employing other organisations to undertake tasks that would ordinarily be done within a company. Payroll processing, accounting, distribution, and a variety of other vital services are routinely outsourced by small businesses, often because they have no other option. To save expenses, many multinational corporations look to outsourcing. As a result, entire industries have sprung up to cater to businesses’ outsourcing needs.
29% of businesses with fewer than 50 employees outsource, compared to 66% with 50 or more employees. When compared to global organisations, smaller businesses are less likely to spend money on outsourcing because they believe it is better to keep the money in-house and do things themselves. Smaller businesses are more likely to use freelance workers when they do outsource.
However, few organisations really comprehend the advantages of outsourcing. True, outsourcing can save money, but it isn’t the sole or even the most compelling reason to do so. As many businesses realised during the early 1990s outsourcing ‘mania’, outsourcing too much might be a larger disaster than not outsourcing at all. Many companies were compelled to make large layoffs as a result of the flat economy, and as a result, functions that should have been kept in-house were outsourced.
This rationale can be helpful in a number of different business areas. Here are some of the top fields where you might consider to outsource.
While affordability is one of the reasons organisations outsource at least some of their operations, a recent survey reveals it is the least of many firms’ worries when deciding who to outsource to.
According to the SavvySME B2B Jobs Report 2021, when it comes to outsourcing, the majority of firms choose quality, industry expertise, and cultural fit over the lowest quote from service providers. In fact, when it came to outsourcing, just 7.58% of organisations prioritised the lowest quotes. Quality, on the other hand, is rated as the most important consideration by 34.87% of organisations.
This sentiment is supported by the recent PWC Global Outsourcing Report, which stated that ‘outsourcing is increasing quickly and delivering results. More people are outsourcing than ever before, and there is no sign of this trend slowing. Our findings demonstrate that outsourcing has progressed beyond cost reduction to become a means for organisations to acquire better access to talent and competencies, gain greater flexibility, reinvent their business model, and drive innovation’.
Outsourcing can be a wise option for expanding your organization’s capabilities while remaining focused on your core skills. One of the best instances of cost reductions is using freelance or contract workers, which can save you between 30% and 50% more than hiring full-time employees. Don’t forget about the other benefits, such as decreased risk, better compliance, and greater resource control. Most importantly, outsourcing helps you to refocus your objectives as a business owner or manager and avoid wasting time, money, and talent (including your own) on activities that could be handled better by a professional outside your firm.