Whether you have a big organization or an SME, your employees are the essential force running through the corridors. This group within the company is the biggest expense category for your business. So, basically, they don’t only bring money for you, they also take it.
As per the U.S. Bureau of Labor Statistics, up to 70% of total business costs can be attributed to labor expenses, potentially hindering the expansion of startups and small businesses.
Luckily, numerous major Fortune 500 companies have a hidden strategy for controlling staffing expenses – they contract out tasks to an outsourcing agency.
66% of US companies with 50 or more employees opt to outsource, compared to 29% of employers with less than 50 employees. And what do they receive in exchange?
Businesses that outsource work benefit from increased efficiency, higher productivity, enhanced innovation, and reduced costs.
It is now so common that 68% of major U.S. consumer goods companies contract out a portion of their workforce. Let’s investigate the seven factors why you should think about transitioning from internal to outsourced work.
What is Outsourcing?
Outsourcing occurs when businesses enlist the help of an outside service provider –
To aid them with tasks,
Offer extra resources, and
Support their current employees.
Like, among over 220,000 employees at Microsoft, only 131,000 are members in the company. Many contract workers assist Microsoft’s internal employees.
Because a large portion of Microsoft’s employees are contracted, they typically delegate project management for these workers to external sources.
This leads to the outsourcing suppliers taking responsibility for overseeing the daily tasks of Microsoft’s contract workers, thereby lessening the in-house team’s job responsibilities.
Why Should You Work with an Outsourcing Company?
1: Cost Efficient
Outsourcing frequently results in significant cost reductions for the company. By using external resources, companies can prevent the need for expensive investments in internal infrastructure and staffing. This prudent financial management enables most companies to –
Strategically allocate resources,
Promoting growth and innovation.
Ensure that the technology being used for outsourcing is up-to-date and utilize software to monitor the performance of project employees.
The objective is for them to maximize the efficiency of your money by using various strategies and ideal working hours. Perhaps they are not physically present in your office, but the partners are still diligently working on your project.
2: Getting Access to the International Talent Market
Outsourcing provides access to a worldwide pool of skilled workers.
Businesses can utilize the knowledge of experts from all around the globe, incorporating a variety of viewpoints and abilities. Having access to a large talent pool enables businesses to approach intricate projects with exceptional skill.
Some organizations have been leveraging a worldwide talent pool for a long time and are skilled at finding the ideal match for your company.
Though it’s not the same as hiring locals or employees within the company, bringing in high-performing individuals from other places adds diversity in cultural and personal experiences.
3: Better Flexibility and Scalability
Outsourcing allows for rapid adjustments in operations to meet market demands by scaling up or down as necessary. It is highly essential for companies to manage ever-changing environments, guaranteeing they can adjust to new circumstances without sacrificing efficiency.
If your business experiences rapid growth within a few months, there may not be enough time to locate and coordinate training for a brand-new customer support team.
However, you can always locate a reliable partner company to delegate this service and enjoy the advantages of a skilled team without going through the entire recruitment procedure.
One major advantage of outsourcing tasks such as customer support, marketing services, or IT services is that once the work is completed, you have no further obligations to them.
Team members will carry out their responsibilities and will not be a hindrance to anyone if they are not required for a while.
4: Focusing on the Core Competencies
By subcontracting non-essential tasks, most companies can shift their attention to fundamental strengths. This realignment boosts their overall productivity and efficiency by focusing all of their resources on activities that directly support the organization’s strategic goals.
Outsourcing a significant amount of work allows businesses to have more time and resources to concentrate on expanding and staying competitive.
If customer support is outsourced, it frees up important time to focus on tasks that cannot be delegated. It is crucial for every company to adopt this process to remain competitive and relevant. Be sure to join in soon and keep up with the competition.
Advantages are measurable, allowing you to gather information to monitor the delegated staff and track the advancement of your company with them.
5: An Accelerated Time-2-Market
Outsourcing speeds up product development cycles by leveraging expertise from outside sources. Collaboration between internal teams and external partners can greatly reduce time-to-market, providing companies with a competitive advantage in rapidly changing sectors.
The new team is much more experienced in many tasks and services required, maximizing their efficiency in the company, which will likely be supported by data in assessments.
The likelihood of them not providing you with a benefit is minimal, possibly even non-existent in certain situations.
Bonus: Making the Most Out of Technological Advancement
Keeping up with technology is difficult in our rapidly changing world.
Outsourcing allows companies to keep up with the latest advancements without spending a lot on in-house research and development, helping them stay at the forefront of innovation.
Perhaps enlisting an external team could assist your internal team with –
The new software you’re utilizing,
Tackling difficult tasks, or
Simply providing guidance on complex issues.
Although intangible, selecting the correct partners can lead to noticeable results.
The Cost of Outsourcing
It is essential to comprehend the expenses linked to outsourcing for making informed decisions. So, if you want to know more about the financial aspects of outsourcing, covering initial setup expenses and ongoing operational costs, it might be better to consult with Hugotech.
Every company opting for outsourcing must accept that a significant investment is required at the beginning. However, if you opt for seeking external assistance, such as hiring marketing or IT personnel, you will reap long-term benefits and experience a positive return on investment.
