A Guest Post by Noah Rue
Outsourcing is something many small businesses use to help them compete while staying lean and agile. Large companies might also choose to outsource in order to save money and gain focused expertise, especially when those experts are not within range to work in-office.
No matter what size your business is, you know it’s important to save money in order to maximize your profits. How can you take advantage of the right services to make your business more effective and profitable?
Outsourcing allows you to control costs, which is the largest reason that companies use it. You can pay for services as you need them and avoid making major investments in infrastructure, software, and personnel. Further, you’re able to increase the efficiency of your business by getting expert help without having to hire experts full-time. Whenever you have a job that doesn’t fit nicely into a current employee’s duties, it’s worthwhile to outsource to a professional rather than hire and train a new employee, and involve yourself in the compensation and talent development planning that naturally comes with internal employees.
In general, outsourcing allows you to keep your labor costs low overall. You don’t have to hire, train, and provide benefits for an IT department or accounting if you choose to outsource those functions, for example. Having individual remote workers helping with marketing, content creation, and more can also keep expenses manageable.
Finally, outsourcing can allow for far better time management by everyone else on your staff. For instance, Beyond Meat outsourced its HR function in order to better focus on its core business, and it paid off in a big way. As they did, if you provide software as a service (SaaS), for example, you don’t need to spend a lot of money on a separate employee benefits department when you can outsource that service.
What Should Businesses Outsource?
There are a wide variety of functions you can outsource, including, but not limited to:
Accounting and payroll is a challenging and complex area for most businesses. You need specialized software and staff that can track a variety of variables to ensure that everyone is paid the right amount on time. Finding reliable and affordable help in this area can save you significant time and money.
Outsourcing accounting can also increase controls and reduce fraud while giving you access to industry-leading software and services without the upfront costs.
Human Resources is another area that has a lot of moving parts. It not only includes hiring and firing, but also administering benefits, setting up retirement plans, and more. Instead of hiring and training your own full-time employees, consider using a professional services company that has everything built-in.
A study from 2012 shows that businesses that outsourced HR grew more quickly, had less turnover, and were 50% less likely to go out of business than those who didn’t outsource.
Information Technology (IT) requires very specific expertise and a lot of physical infrastructure. Businesses of all sizes have found they can save significant money by outsourcing their IT needs to companies who already have the equipment necessary.
Experts in the field point to both automation and cloud services as driving cost savings. Outsourcing IT can save a company 40% or more on their information technology needs.
How to Outsource Effectively
There are a lot of tips and tricks on how to outsource effectively. As such, you want to research your options carefully and compare different providers to find the best value for your business.
If you have an online business, there are specific things you can do to stay competitive and keep costs low. For instance, determine exactly what you need help with, write down the skillsets you’re looking for, and find companies or remote workers that fit that profile. As an example, let’s say a company needed to hire a freelance writer to help them with blog content and other writing needs. Choosing an experienced and high-quality writer is essential because they will be helping build your reputation.
You’ll want to follow several steps in hiring your writer. Carefully evaluate the writing of candidates, think about their experience and how it applies to your industry, and find someone whose communication style matches your business. Finally, set firm deadlines and invest time in training your new writer.
When you do, you’ll have a successful long-term relationship that will be a win for both of you!
Outsourcing Contributes to Your Bottom Line
No matter what you outsource, you’re likely to save money over having that department in your own business. You won’t have to pay full-time salaries, benefits, or invest in expensive software and equipment.
When you outsource, you can pay for exactly what you need. If you haven’t started outsourcing yet, try just one function. You’ll be amazed by what you save and how much more efficient and profitable your company will be!