Outsourcing

What started as a sporadic trend of large corporate giants moving their production to countries with cheaper labor force has become a tendency of even the smallest companies and startups in the last decade or two. The advancement of technology, and especially the internet, made this process possible for companies of all sizes and resources. The problem is no longer where to find outsourcers because they can be hired from any part of the globe without too much hassle and resources so it has become vital for managers to get acquainted with the how-to-outsource process.

Why to outsource?

Companies are managing to save a lot of money by outsourcing certain day to day tasks. Law firms started with outsourcing some document review tasks to lawyers from other countries because their pay rates were a lot cheaper than pay rates of domestic lawyers, especially for tasks regarding documentation reviewing. IT companies were able to outsource a lot of their tasks to oversees crew and cut down expenses of pricy IT experts for certain tasks while still keeping some management and leading positions in-house. A lot of other companies from various niches were able to successfully outsource some general positions like virtual assistants and bookkeepers. Depending on the exact niche your company is in, you may outsource certain positions in an attempt to cut down expenses and even speed up certain tasks if you are already overwhelmed with other duties and obligations.

When to outsource?

There is no best answer to this question, because some companies first try to develop their business and then outsource certain tasks when there is a need for that, while others do it from the very beginning. What some companies noticed is that certain activities may bring up the costs to an even higher level when outsourced than when being handled in-house. The reason for that is usually inefficient labor force or expensive transporting conditions which then overcome the positive effect of cheap labor force. So do not rush while making this kind of a decision. Run through all calculations first and see which positions could be outsourced with best expense savings while maintaining efficiency and transport or other costs at a reasonable level.

What to outsource?

As we already mentioned, depending on the exact niche, there are certain positions that can be outsourced pretty much within any company. Theoretically, any positions could be outsourced nowadays; however, that doesn’t mean that it should be done only because it is possible. There are a lot of expert opinions claiming that companies should not outsource their core services or core products. This, for example, means that if a company offers design services, then it should not outsource designers. Again, depending on the company’s focus some highly repetitive tasks should be outsourced whenever possible, such as data entry, shipping inventory, etc. There is also a high demand for outsourcing certain IT services like technical support or part time projects where hiring a trained professional for some short term projects would be very pricy. Some companies even hire highly skilled experts at significantly lower pay rates to do certain tasks in their companies, such as a financial analysis or similar tasks.

Cost control

The same way as companies track any other project costs or production costs, they should monitor the cost of their outsourcing labor and transport. At any time, managers should have clear picture of how much outsourcing is helping them cut down the expenses of production or services along with the costs of shipping of their products in case of manufacturing businesses. Efficiency of such outsourced labor force is also the key factor, so whenever possible the company should use all available tools, such as NimbleSchedule or similar online scheduling solutions to monitor their work force activities, as well as employee efficiency and time attendance. These factors may mean the difference between success and failure, so keep your outsourcing costs under constant monitoring and learn how to outsource properly.

Karin Jakovljevic

About the author

Karin Jakovljevic

Karin Jakovljevic is the head of marketing at Ximble, a powerful, cloud-based workforce management system, simplifying employee scheduling and time tracking for retailers, restaurants and small businesses.

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