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The benefits of outsourcing for small businesses - When and What to outsource

Updated: Aug 4, 2020

Through outsourcing, companies hire temporary workers instead of full-time workers to complete ongoing tasks or to fill temporary positions and outsource time consuming work. This allows SMEs to outsource their tasks to individuals who are well-versed in those areas. Similarly, through outsourcing to management consultancies such as Accorrus, companies are able to tap on highly skilled individuals, without having to compensate additional benefits that a regular full-time staff would usually be entitled to.

Outsourcing has helped many companies reduce their labour costs, and levels the playing field for SMEs by hiring highly skilled individuals to perform specified tasks. By allowing smaller companies to tap on their economies of scale, efficiency and expertise levels when outsourcing services such as payroll and bookkeeping services, SMEs are able to compete with larger firms. This also allows companies to focus on the more pressing issues at hand. Firms often waste many months finding the right fit for the job before training these individuals to equip them with the knowledge to perform well. When outsourcing, the entire training process is eliminated which saves companies both time and resources.

It is essential to know when, as well as which services are beneficial to be outsourced. In general, it is best to outsource when additional tasks are assigned but insufficient to require another full-time employee. However, for smaller businesses, it is advised to outsource from the very beginning, in order to save resources and time training new hires. It is suggested to begin with an outsourced bookkeeper and virtual assistant, before moving on to outsource more services.

Sufficient knowledge on the various types of services that should be outsourced strategically is also necessary. These services fall under 3 main categories – repetitive tasks, specialized tasks, or tasks that require high expertise are often the first on the list to be outsourced. These include services such as payroll administration or simple bookkeeping. Do keep in mind that with the wide array of services you can outsource, outsourcing should only be done when necessary and to trusted sources. Outsourcing services that are salient to your core business is not advised, no matter how much you detest doing such tasks yourself.

Finding the right people to outsource your services to is another factor to take into account before doing so. You could start off by liaising with close contacts who are able to provide recommendations, or engaging trusted sources with a wide portfolio of experiences with renowned companies. After finding the right partner, clear communication of expectations will be required from the very beginning. Do not leave anything up for assumption as individuals tend to interpret situations and tasks differently, especially when they are unfamiliar with your company’s practices at the start.

Lastly, it is important to relinquish control and put your trust in the experienced workers that you have hired to live up to the expectations you have set! Not giving them the space and chance to work on the tasks that you have assigned would hinder their motivation levels, and would make them feel that you lack trust in their expertise and capabilities.

Outsourcing as always, comes with its own pros and cons – pros being the fact that it is an affordable strategy to hire a team of highly skilled and experienced employees, which then allows you to focus your time, attention and resources on the company’s core competencies. However, outsourcing may hinder the confidentiality of information, be it client’s personal data or the company’s, and when outsourced to untrusted sources may not reap the maximum benefits that it supposedly brings. In the case of outsourcing, the phrase “what you pay for is what you get” is immensely relevant. It is important that when sourcing for contractors, companies do not only consider the costs, but also the amount of expertise and experience that figure is backed up by.

All in all, if done correctly outsourcing does come with a great deal of perks for companies, especially SMEs. It is crucial to be strategic when deciding which types of services to outsource as well as who to outsource to, to ensure that all practices are in line with company’s long-term goals.

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