Outsourcing gets bad-mouthed a lot by people who see it as a trend that showed up pretty recently in business history. It is seen as a way to keep wages low using methods that take jobs away from the working economy in the United States.
The truth is that outsourcing isn’t new. Blacksmiths didn’t mine for iron in medieval times, after all. Just as importantly, Outsourcing work is often a practical decision that offers a lot of benefits to growing businesses.
Less Expensive than New Employees
Every business is a little different, but the average cost for new hires is around $4,000. Here’s the scary part. That’s how much they cost before they do any work. Depending on your exact needs, you can often outsource the work for less than recruitment, hiring and onboarding will cost.
Avoid Infrastructure Costs
Some infrastructure costs, such as an office or in-house network, are unavoidable. What if you need to update or verify the contact information for a 10,000 person customer list? You can build an outbound call center, but you probably won’t need it again. Outsourcing lets you avoid that infrastructure cost.
Access Part-Time Expertise
Say that you run a catering business. Your expertise is in cooking and business management. You still need a website and at least one or two computers. You don’t need a full-time IT person or web developer, but you will need experts sometimes. Outsource your needs and bring in a web developer or IT expert on a part-time basis.
One of the big arguments for outsourcing is that it lets a business stay focused on core activities. Anything outside of those core activities is a distraction. Take the owner of a graphic design firm, for example. Is her business better off if she’s doing bookkeeping and trying to figure out an SQL database or if she’s drumming up a new business?
Sometimes, a part of the business becomes so expensive that the cost outstrips the ROI. Maybe your marketing team’s budget has been getting bigger every year, but you don’t see an uptick in business to justify it. Those costs will likely keep rising with no apparent benefit. Outsourcing lets you set a limit on those costs and hold someone to it.
Outsourcing isn’t always a bad thing. It lets businesses access experts they don’t need on a full-time basis. It’s often less expensive than hiring and onboarding new employees. It enables you to avoid infrastructure costs on tasks or services you might only need once. It keeps a business focused on core activities. Plus, it’s a method for controlling operational expenses that got out of control. When used well, outsourcing is a boon to businesses.