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Why Are Companies Deciding To Outsource More Work?

outsource work

If you’re a small business owner who sometimes feels overwhelmed with all the work that needs doing, or if you have a lot of menial tasks that are keeping you from doing the work to move your business forward, maybe it’s time to consider outsourcing.

In this article, we look at why small and medium-sized businesses choose to outsource work, how it can benefit them, and how to find the right vendor to handle these tasks.

Why Companies Outsource

There are a variety of reasons a company might decide to outsource work, but the most common reasons are:

Reduction in Costs 

Not having to hire and train an employee, plus pay them benefits is the primary reason companies choose to outsource work. Getting the same work from a contractor that you would from a full-time employee saves money and makes the business more profitable.

Increases Efficiency & Focus 

For the small business owner, having to deal with tasks that take them away from doing the work they get paid to do makes them less efficient and makes it harder to grow their business. When you outsource these secondary and tertiary tasks to a contractor, you can focus on your core business, which is doing what your customers pay you to do.

Frees Up Resources 

If you’re running a small business, then you likely have limited resources. And the resources you do have should focus on the essential tasks necessary to keep the business running and to improve customer service. Any job that takes away from this hurts your business, and it’s better if you can outsource these.

Increases Flexibility 

Business landscapes change quickly, which means you need to be agile enough to meet current market demands and conditions as they change. The ability to outsource work to a competent contractor quickly means you’re better able to meet these demands without having to stop, look for a suitable employee, hire, and train them.

You Gain Capabilities

Another significant benefit to outsourcing is that it provides you with a wealth of capabilities that you may not have if you were to hire an employee. With outsourcing, you can hire virtually anyone around the globe, and you have access to a wealth of talent should your needs change down the road.

Risks To Outsourcing

Like anything else, not everything is rosy with outsourcing, and there are risks and downsides to watch out for before you go down this road. This is not meant to deter you, but be aware of some of the roadblocks you may face, such as:

  • Outsourcing can make your staff uneasy about their position, which may cause them to leave for something that appears more stable.
  • While outsourcing is a great way to get competent workers, sometimes the service you get is subpar, and you end up hurting your business and your company’s image in the process.
  • Outsourcing work almost always puts some of your data at risk. If you end up with a contractor who becomes disgruntled, some of your company’s data could end up compromised.
  • Depending on who you hire, you may find difficulties with time zones and language barriers.

why should you outsource

How To Choose A Vendor For Outsourcing

Now that you know the pros and cons of outsourcing, and you’ve decided it’s worth exploring, let’s look at how to choose a vendor for this.

The first step is to make sure you’re clear on what you’re looking for before you start. Knowing exactly the type of work you want a contractor to do makes it easier to find the right person for the job. Make your goals and objectives as clear as you can before you begin your search. Doing so ensures a better experience for both you and the person you hire.

The next thing to do is to check your vendor’s experience and qualifications. Ask them for references or if you’re using a job posting site, read the reviews and ask them if it’s okay to contact their previous employers to make sure they’re a good fit for your company. 

Also, depending on what you’re hiring the worker to do, ask for samples of their past work and make sure you both have a clear understanding of the work to be performed and the timeframe in which to perform it.

Before: 

You agree with a contractor, be diligent about making sure they have excellent communication skills and management practices. You can test this early in the process to see how quickly they respond to messages and how they plan for meetings. The lack of communication will leave you frustrated and make the working relationship go sour quickly even if they turn in high-quality work.

In the cons when outsourcing, we mentioned time zones, and it’s something to consider when hiring a vendor. Be honest with yourself and ask if working with someone in a different timezone is worth it. Do you ever see a situation where you’ll need that vendor to be available according to your timeframe? 

Make sure both you and your vendor are clear and on the same page about the agreements and what you’re paying them to do. Also, ensure you include in your contract stipulations regarding intellectual properties, company data, and other sensitive information. You must get this in writing to protect both you and the vendor.

For the small and medium-sized business owners, outsourcing is a great way to be more productive and efficient without putting a strain on your bottom line. If you lack expertise in an area of your business, or if you find yourself spending too much time on tasks that take away from your productivity, consider outsourcing that work to a contractor.

Can you think of areas in your company that can benefit from outsourcing?

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