Small businesses play a big role in the nation’s economy as they typically provide lots of employment opportunities. While the word “small” might give some the mistaken idea that such businesses aren’t significant players, economic experts universally understand the contribution small businesses make to the county’s economy. As basic as operating a small business might appear, the tasks are often different from those in highly competitive corporate markets that aim to reach massive audiences. Therefore, as a business starts to gradually grow and expand, one way to achieve better efficiency – higher returns for a lower investment – is to explore outsourcing options.
Staff Outsourcing has provided outsourcing services for small business and eCommerce companies and has over 15 years’ experience in the area. They provide a wide array of services across a wide range of different areas. Their operations manager James Davis – Operations Manager discussed the benefits of outsourcing with us a few weeks ago and here is what we gathered about this approach.
Over the past two decades, staff outsourcing has become incredibly popular and is now a commonly used term. In general terms, outsourcing is the assigning of specific business process to agencies or independent contractors located overseas. After all, many business processes, if not the majority, can often be carried out remotely, as many processes don’t require any physical presence in the USA by the worker or team.
For example, internet-based businesses are able to outsource all their customer support team roles, while online media companies can hire remotely stationed content writers. The list of possible outsourcing roles continues across other departments, such as marketing, HR, web sales, phone sales, and customer support. There is nothing to be ashamed of when it comes to outsourcing and multiple small businesses are already using a range of outsourcing providers for many of their day-to-day operations.
That all said, as good as outsourcing sounds, it is not a perfect solution for all problems. Like everything else, the concept has both benefits and drawbacks. Consequently, instead of jumping straight to the conclusion that outsourcing is the right route for your business, it would be much wiser to first take a look as some of the pros and cons of the concept. By doing so, you will be able to make a more informed decision as to whether or not outsourcing is the right choice for your company.
Benefits Of Outsourcing
Let’s begin with the most obvious “pro”: lower labor costs. There are millions of professional contractors around the globe ready to work for your company for much lower wages than those located in the US. Therefore, outsourcing some roles, or even an entire department, can save US-based businesses a lot of money. What’s more, outsourcing lots of minor jobs can leave managers with more time to work on creating expansion strategies and optimizing current business operations. In addition, when you outsource work to a contractor, you are essentially transferring all responsibility related to a particular department to them, which means you don’t have to go through the hassle and expense of hiring new employees. All you have to do is let the contractor know what your requirements and expectations are and everything else will be managed offshore. Plus, outsourcing has the added advantage of delivering higher quality work in a shorter time frame. All obligations for hiring workers fall to the contractor; you just take delivery of the final result.
Drawbacks Of Outsourcing
As previously mentioned, it is not the case that outsourcing provides the ideal solution for all businesses, and often what has advertised a key benefit, can turn into a drawback. For instance, while better quality and faster work speeds are generally a big positive of outsourcing, they can also become a major con. This is because finding a contractor capable of meetings all your expectations can be difficult. Therefore, to save time, you might opt to collaborate with an outsourcing agency whose employees don’t deliver the high-quality services you require. Consequently, as opposed to being a good investment, outsourcing can turn into a waste of money.
Another drawback of outsourcing can be a lack of control. Small business managers certainly want to avoid losing control and oversight over crucial business processes, but this can sometimes happen too easily when entire departments are outsourced as opposed to being operated within a business. Moreover, in addition to control over the process being lost, control over people carrying out the tasks is also lost. You will not be able to see how tasks are being completed and implementing changes might be more difficult. Naturally, this draws to light another drawback of outsourcing, namely communication issues. If the contractor resides in a different tone zone or has an unstable electricity source or internet connection, they can lose contact at crucial moments, leading to overall dissatisfaction for both you and your customers.
When everything is considered, whether or not outsourcing is the best step for a small business depends on multiple factors. For instance, it’s important to choose the right outsourcing provider if you want to be confident that all tasks will be completed accurately and within the agreed timeframe. Additionally, it’s important to work with trustworthy outsourcing agencies that can offer open communication. At the end of the day, outsourcing is designed to save you money and time, so if you don’t find high-quality labor at lower rates, it could be better to simply hire new in-house employees.