There’s a proverb in the business world that CEOs and company presidents all over the world follow – never outsource your core business. It makes sense. Successful companies develop a reputation for providing one, maybe two, core functions better than their competitors. If you move away from what made you successful in the first place, you’re most likely dooming your company to failure. Benefits of outsourcing some key functions of your business will highly save your cost.
With that being said, outsourcing has gained a lot of popularity in the past few years. In 2013, over 2 million U.S.-based jobs were outsourced. The potential to save money, focus on your core functions, and most importantly, devote more time to your customers have been major selling points for many companies.
While there’s an ongoing debate about the impact on the labor market and the national economy, there’s no denying about benefits of outsourcing the following functions will very likely help your company grow.
Benefits of outsourcing: “But First…Why Outsource Work”
You might be tempted to think that if you want to get the best results, you also need to directly manage each function your business performs. The reality is that this is only the case for what actually makes you money, i.e., your core functions. Non-core functions may be essential, but they don’t actually make you money. Plus, non-core functions often don’t require extensive training or special skills to be effective. Basically, anyone with half a brain can do them.
So think about it like this – is it really worth paying full price for a job that anyone can do? Outsourcing allows you to handle the necessary evils of running a company while saving costs on:
- Payroll
- Taxes
- Health insurance and workman’s compensation
- Recruiting
- Training
- Office space
Additionally, since most non-core functions aren’t what you’d call fun, it’s easy for people in those roles to become unmotivated. Unmovtied employees aren’t productive. By contrast, companies that specialize in these functions recruit people who have molded their professional lives around performing in these roles.
1. Human Resources
The sad truth is that every company has to manage payroll, keep up with taxes, and manage their employees’ benefits. Those responsibilities land solely on the shoulders of the HR department. Here’s the thing – most HR functions don’t have to have some elite worker sitting in the chair. They also don’t have to be done in-house. Benefits of outsourcing HR Department will save you a handsome cost at the end of each month
A study released by ADP in 2017 found that small business who maintained their own in-house HR teams cumulatively spent around $27 billion on HR functions that year. With some estimates placing savings from outsourcing at around 50%, that’s a potential $13.5 billion that could be going to innovation, market research, and other money-making ventures instead.
2. Call Center Support
Ask yourself this question – how do customer support reps really know what they’re talking about? Do they typically receive extensive training in each product or service a company offers? Or do they usually get a crash course, along with a guide that tells them how to address specific problems based on what customers tell them? If you guessed the latter, you’re right on the money.
Now, ask yourself another question – However if most customer support reps are reading from a step-by-step guide, and they’re not truly experts, do I really need to pay 75% more for them? The answer is obvious.
Customer satisfaction has to be one of your primary concerns as a competitive business. While it is important that your customers know they can rely on your ability to support their purchase, that doesn’t mean one of your own people has to be on the call. Benefits of outsourcing your call center support functions is a great method to save money while keeping your clients happy.
3. IT and Web Development
In the modern age, your IT department is probably the single most important non-core function your company has. Why? Because nearly everything is online. Aside from maintaining your company website for customers, your IT department keeps your network up and running, integrates any new technology into your workplace, and protects your data from hackers. With so much at stake, your IT department has to be smart and they have to be good.
Despite that, IT is not an essential core function for most businesses. IT simply allows you to perform your core function more effectively. And if you try to bring in your own IT team, you also have to be extremely knowledgeable about what makes a great IT professional. If we’re being honest, most businesses just don’t have that initial expertise.
Outsourcing your IT and/or your web development function not only saves you money but also enables you to entrust your network to an experienced team who knows exactly what it takes to succeed.
4. Marketing
By outsourcing this particular function, you may also not actually save money. In fact, you may end up spending more than what you would on an in-house team. The difference is that by leaving your marketing to a seasoned team, who knows how to communicate with customers, your ROI can more than make up the difference.
The tricky thing about marketing is that it’s such a specialized field. And great marketers are a combination of a salesperson, graphic designer, artist, and psychologist all rolled into one. They’re typically innovative but can be very aloof. Boredom is a constant threat to these highly critical thinkers. However if they’re stuck with the same company for years, motivation can take a nose dive, and productivity can suffer.
Outsourcing your marketing efforts to a team that knows what they’re doing can also make you far more money than you spend and keep your marketing efforts at the cutting edge.