Outsourcing can be a useful alternative to hiring in-house employees. It involves paying other companies or freelancers to take over tasks such as accounting, marketing, IT management or even answering the phone.
Not only is outsourcing more convenient than hiring, but it can also be a lot more cost-efficient in many cases. Below are some of the ways in which your business could save money by outsourcing.
Access global talent
Outsourcing allows you to access talent from around the globe rather than being limited to your own country. These are typically known as offshoring solutions. A benefit of offshoring is that you can often access talent at much cheaper rates. Of course, you do need to be careful not to exploit workers (when outsourcing a manufacturer abroad, it could be important to research them to make sure that workers are treated fairly).
Reduce recruitment costs
Outsourcing reduces the need to recruit as many specialist employees. It’s generally much cheaper because you don’t have to worry about paying for recruitment advertising, providing employee benefits or paying for training. Outsourcing fees are also much cheaper than wages – the cost of outsourcing an IT support company is likely to be a fraction of the cost of hiring your own in-house IT support team.
Buy less equipment
When you hire employees, you need to acquire all the necessary equipment for them such as office furniture, computers and software. When you outsource a company or individual, you don’t have to worry about buying any equipment – the service you outsource will already have all the tools. It’s also possible to outsource equipment by hiring or renting it instead of buying it. For example, if you need to print off some documents but you don’t have a printer in your office, you could outsource a printing service rather than buying a printer.
Keep your premises small
Less employees means less need for larger premises. A smaller office or factory will ultimately cost less in rent and bills. All in all, it’s a great way to grow your business without having to spend huge amounts of money acquiring space. Many companies in cities find that outsourcing is essential because of the high cost of commercial premises – a large office is not feasible for most businesses.
Dedicate more time to core tasks
Outsourcing can allow you and your team to focus on your company’s core tasks – the tasks that your customers pay you to do. In being able to focus on these core tasks, you can find ways to make them more efficient and save money. When you’re having to juggle lots of other tasks, it’s harder to focus on making cost-saving improvements to other areas because you don’t have the time.
Outsourcing gives you this time. It can be particularly beneficial to solo business owners who may currently handle everything from bookkeeping to marketing – by outsourcing all of these admin tasks, you can achieve a better work-life balance and pour more time into the work tasks that you enjoy/are good at.