Why Outsourcing is a Good Business Strategy in 2022

just the facts why is outsourcing a good business strategy in 2022

Now that the global economy is getting back to business, post-pandemic, and business’ doors are starting to open, once again, many companies are faced with the tri-fold predicament of the sudden (and significantly higher than normal) influx of customer demand, being short-handed, and possibly not having the spare funds to rehire to a level their business needs.

This e-PA: Just the Facts entry is going to look at outsourcing, an increasingly popular business model that can often provide many benefits over hiring new staff.

“Outsourcing is the business practice of contracting with an outside party to take care of certain tasks instead of hiring new employees or assigning those tasks to existing staff.” (The Balance Small Business)

The size and nature of these outsourced tasks may be something simple and occasional, such as hiring an accountant to do your taxes once a year. They may also be a regular part of business operations, such as contracting with an answering service or virtual receptionist provider to look after your inbound customer enquiries.

To many business owners, outsourcing can be a frightening proposition. Despite this, it is a business model that has been adopted worldwide across both the private and the public sectors, and it provides multiple benefits.

“[Outsourcing] improves efficiency, cuts costs, speeds up product development, and allows companies to focus on their ‘core competencies’.” (FESPA)

Let’s take a closer look at some major benefits of outsourcing, some of which are mentioned in the above quote, in order, to better understand the merits:

Reducing Costs & Improving Efficiency

A particularly prevalent issue facing the world, post-Covid, is the exponential rise in costs in almost every area of running a business – from supply, to employment, utilities… and beyond. Operations with rising costs should be considered for outsourcing, as the expense of purchasing equipment or needing a new location can often be prohibitive. In these cases, it’s more cost-effective to outsource than to expand operations internally.

If the growth of your business results in an increased need for office space, try outsourcing simple operations such as telemarketing or data entry rather than moving to a new location. It might cost far less than the price of expanding, and it is both more efficient and less expensive than relocating.

Outsourcing can also lower costs by reducing the expenses associated with bringing on new employees, such as:

  • A hiring search

  • Onboarding

  • Healthcare and other benefits

  • Payroll, PAYE, NI, & other employer expenses

  • Increased need for workers in management and HR positions

Working with outsourced contractors, as opposed to employees can minimise these costs, allowing your business to get the same amount done for less.

Promote Business Growth

The overhead costs of some business operations can be extremely high, but often essential, in order to to satisfy customers, expand a business, or better compete in the marketplace. Outsourcing can be a good option if the cost of expanding to handle those operations yourself is too expensive, would take too long to effect, or would create inefficiencies in your business.

For instance, your small estate agent office has just received a new super-hot property on its books, but one staff member can’t keep up with all the enquiries, viewing requests, and diary bookings. Outsourcing to a firm that specialises in enquiry handling and diary management will cost less than hiring additional skilled staff or training existing personnel, while still increasing the benefit to your customers, and ensuring none of these enquiries slip through the net.

Maintain Control

Departments that have evolved into uncontrollable or poorly managed areas are good candidates for outsourcing. An outsourcing company opens your business up to a wider pool of talent, and can often bring better skills to your company than otherwise available.

For example, let’s say your IT department has too many projects, not enough people, and a budget that far exceeds its contribution to your organisation. An outsourcing agreement with an IT contractor will force management to prioritise their requests, bringing projects and spending back under control.

Another huge benefit is also that, as opposed to the regular unforeseeable and unexpected operational costs, outsourcing usually means prices are fixed and contractually agreed upfront, allowing a greater level of control.

Increase Staff Flexibility

Outsourcing allows operations or departments that have seasonal or periodic demands to bring in additional resources when they’re necessary, either on an ad-hoc, or an overflow basis. This could be hugely beneficial for a company that sees particularly busy periods or seasonality, such as over Christmas, as an example. The outsourcing company can then be released/put back on standby when things slow down again, maintaining a company’s flexibility.

Outsourcing also removes the downtime and wasted expense, brought on by sickness, holidays and general absenteeism. Companies that specialise in offering outsourced services generally have an ‘always available’ policy, ensuring there is always a member of their team available to complete your business’ tasks and operations.

Provide Continuity and Consistency

Periods of high employee-turnover can add a level of uncertainty and inconsistency to a business. The level of training and experience of a new hire, or the time needed to train them (thus removing someone from their own tasks) can often pose a problem when trying to build a solid and reliable team.

This inconsistency can be particularly damaging to a company or brand’s reputation if it occurs within the customer-facing departments of the business. Outsourcing provides a level of continuity to the company while reducing the risk that a substandard level of service could be delivered to your customers.

At e-PA, being your outsourced customer service and business support specialist is what we do! Why limit yourself by hiring a single member of staff, when your customer enquiries could be handled by a dedicated team of professionals who possess a wider range of skills and talents, at a fraction of the cost and hassle to you and your business? Try us for FREE, and see for yourself just how much better off you will be.

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