Are you wondering about outsourcing, but sure what it is? Well, you’re in the right place. In premise, outsourcing is often referred to as contracting out, meaning you assign tasks to an external workforce for a period of time.
In this article, we will cover what is outsourcing, what to outsource, and when to outsource. keep reading to learn more.
What Is Outsourcing?
Delegating operations, job, shift tasks, processes to an external workforce via contracting with third parties for a period of time is called outsourcing.
A business will most often do this when they are in need of improved efficiency or reduced costs. Outsourced functions can easily be performed by the external part offsite or onsite of the business.
What to Outsource?
The kind of activities that you choose to outsource will be variable upon the industry in which you operate. In general, however, there are two categories of tasks that are most outsourced, and they are:
- Activities critical to the operational functionality of the business
For instance, if your business manufactures organic snacks. As this business owner, you need to deliver your product to outlets and grocery stores, however, how you choose to do is unlikely to affect the end-customer.
Given this, it might be a strategic advantage to outsource, rather than to ship the product on your own. If you can ensure cost-effective and timely deliveries, while avoiding storage fees and extra delivery costs, outsourcing is the most obvious thing to perform to help complete this task.
- Commodity tasks
Any type of task that would deem itself a commodity also lends itself well to outsourcing. For instance, many printing companies provide an array of services that include overnight shipping. So if you need to produce lots of business cards quickly, you can employ the services of such a company, instead of investing in commercial-grade printers and inks.
For the next example, you can hire full-time third party members to clean your offices, meaning can leverage the economics of scale that facility full-scale businesses offer. The finances saved on full-time staff can be redirected to other aspects of your company. Customer service is often outsourced as well.
Now let’s cover when you should outsource.
1. Cost of Equal In-House Work
Time is limited for everyone, but more so for a business owner, and especially your workers. There’s always an opportunity to cost for completing tasks within the company.
For instance, if you have one in-house marketing specialist, and you are launching a huge campaign this month, think about what you might stand to lose by having your employee dedicate all of his time to this project and nothing else.
Will other key components of the marketing lose traction? Will customer lead and acquisition deplete in a single area?
When thinking about hr outsourcing, don’t just think about the cost of hiring the delegated individual. But consider the opportunities and resources that you are sacrificing internally if you don’t reach out for help.
2. Do We Have the Skills?
In some cases, you’re much better off employing the services of a contractor for what he is really good at and letting your employees stick to what they are good at. If you have a task that you think nobody in-house is able to approach, it makes total sense that you would hire a freelancer.
As the time it takes to make your employees learn these new skills will exceed the time in which you need this task completed.
3. One-Time Outsource?
It always pays to invest in the education, training, and development of your workers, so that they can better handle the growing landscape of the business in the future.
But if you’re looking at something that is a one-off task, it doesn’t make much sense to sink money and time into training internally. You’re much better off finding somebody who can enter, get the job done, and leave.
4. Is It Cheaper?
It might be easy to think that outsourcing will ensure a premium cost. As each contractor has their own overhead to ensure, and part of is bound to the hourly rate that they choose to charge you.
However, the freelancer will also get the job completed quickly, and you might have to pay significantly less when you think about your current worker wages and the number of hours that it would take them.
For instance, if you pay your IT specialists $60 an hour, and it takes 30hours to reconfigure your entire work structure That’s almost $2000 for the entire project.
But if the contractor is charging you $100 and gets the job done in 15 hours, you’re looking at a $300 cost reduction with a faster turnaround.
5. Is There More Value?
One of the greatest benefits of outsourcing is finding specialists. So even if you do have a task that your employees can handle, it might make sense to delegate the task because of their added value.
For instance, your employees might be used to doing the same thing day in, day out. But by bringing a contractor, you bring a fresh perspective, thereby adding more value for the creation of a more compelling result for the project.
6. How Easy It Is?
Furthermore, another important thing to consider is how easy it is to hire a contractor. In some cases, it might be a better idea to perform the project completely in-house, because it might take a week to vet the appropriate candidate freelancer. And you simply don’t have enough time to do so, so don’t forget about that either.
If you’re just starting out with business process outsourcing, you probably don’t even know where to look. PPC is often outsourced, so here are affordable PPC services.
Not all tasks should be delegated, even if they can be. You never want to outsource a project that involves secure information, especially that which involves customers or any other party involved in the process.
By doing so, you place your customers under risk and jeopardize your business, placing it under the scope of penalties and fines. So what is outsourcing? It’s many things.
Outsourcing Done Right
Now that you know what is outsourcing, you are well on your way to find a way to implement delegation into your business in some shape or form. Whatever you choose to do, it will be the right thing to do.
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