<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=602865229879969&amp;ev=PageView&amp;noscript=1">

A Better Answer Blog

The Benefits of Outsourcing During a Recession

It’s no secret the economy is in the midst of a recession. For many small businesses, a recession means layoffs, tough financial times in the future, and even tougher decisions from management.

The Benefits of Outsourcing During a Recession

With the stakes so high during recessions, it’s a good idea to make the most of your limited budget while keeping your customers satisfied and your production capabilities high. The answer: outsourcing.

With the right partners, outsourcing can help you survive and thrive in a recession and weather this economic storm until things turn up again. Let’s take a look at the benefits of outsourcing certain parts of your labor force during a recession.

Cost Savings

By outsourcing certain staffing needs to other organizations, companies can significantly cut their costs. How? It all boils down to three factors:

  • Salary – When you outsource work to third-party employees, you pay flat, regular fees for that company’s services. You don’t pay full salaries (annual or monthly) to employees who don’t directly work for you. In many cases, paying for outsourced labor is cheaper than paying for in-house employees
  • Benefits – Outsourced employees are the responsibility of their employing organizations. For instance, the call center employs the customer service agents, not you. That means your company isn’t on the hook for benefits like sick pay, vacation pay, health insurance, retirement plans, etc.
  • Only pay for work done – When you outsource labor at your company, you only pay for the projects or work completed by that company instead of paying a fixed amount to employees, regardless of how much they work. There's one exception to this in the form of commission employees, but the trend is still generally true.

Combined, these factors practically guarantee that outsourcing some aspects of your labor force will save you money throughout a recession, helping you tighten the proverbial belt, and stay in business until the economy improves.


Another major benefit of outsourcing during a downturn is increased flexibility. As the economy reels, your business must be able to pivot to different goals, clients, or production capabilities as needed. After all, such potential changes might be necessary to keep your clients happy!

Consider just how quickly circumstances can change in a recession. You might need to lay off some recently hired employees rapidly, or you may need to abandon plans to expand your business to another branch or office. In these cases and more, outsourced help can fill in any sudden gaps in your labor force you did not previously anticipate.

Say that you've overextended your finances and have to lay off 10 employees. However, your customer base – and the quantity of customer questions they produce – stays the same. After laying off your employees, outsourced customer service agents from a call center can help you tackle that customer service work without compromising your brand's quality or reputation.

Then, when things improve, you can easily end your contract with the outsourcing company and hire more full-time employees. Outsourcing labor means flexibility both during a recession and after.

Reduce Burnout

During a recession, it's common for stress levels to spike for both average employees and executives. All of that leads to much less tolerance for mistakes.

Ironically, that stress can also lead to an increase in errors. When your employees are worried about whether they will be paid next week, they are more likely to be short with customers, make paperwork mistakes, or create defective products. All of that can contribute to a widespread burnout problem at your business. Unfortunately, this can compound in itself, leading to even more burnout among employees and executives.

All that burnout has a growing and adverse effect on your brand and its reputation. When stress levels increase because of a recession (or any other outside factor), it might be wise to hire outsourced employees to pick up some extra slack.

By outsourcing critical work, you can spread the labor load among more people, helping your employees stay sane and calm during this trying time. By lightening the stress load on employees' shoulders, they'll be more likely to do excellent work and maintain your brand's professionalism and reputation as the recession continues.

Note that you can apply this principle to other high-stress times of the year. For instance, if you get a much greater number of orders for your products and services around the holidays, outsourcing a few employees to help you fulfill those extra orders for a month or two is usually more cost-effective than hiring full employees. It also prevents your in-house employees from experiencing burnout or dealing with a "crunch."

Improve Efficiency

Perhaps most importantly, outsourcing labor during a recession can help your brand improve its efficiency across the board.

Outsourcing various small tasks, like receiving customer calls, handling administrative work, and so on, will help your business run efficiently during a recession. Outsourcing work means your business requires fewer people to keep humming along, cutting down on costs. That’s vital in a down economy, as you must be careful not to waste any money or other resources when funds are tight. A single bad investment can lead to closures or more firings.

Simultaneously, you'll lighten your own workload since you'll have fewer people to manage directly. The third-party work agency you partner with will manage and train any outsourced workers. In this way, you can free up precious brainpower to help you steer your business toward prosperity, even in a recession.

As a side benefit, this increased efficiency could improve your brand’s reputation even as competing organizations flounder. Who knows? You may even scoop up some extra customers you didn’t have previously!

Find Help For Your Business During a Recession

Overall, outsourcing could be one of the wisest strategic moves you can make for your business during a recession. By outsourcing certain labor, like customer service, you’ll save money, improve business flexibility, reduce burnout among your in-house employees, and bolster business efficiency.

Why wait? Consider outsourcing some of your labor during this recession ASAP. Of course, you’ll want to make sure that you hire the right third-party work agency for your needs. Here are some questions to ask when hiring an answering service to ensure you get the best customer service agents for your brand.

Topics: outsourcing during recession