Outsourcing of Work

Hiring vs outsourcing? Hiring in-house staff to accomplish sporadic tasks could be expensive and unjustifiable. Outsourcing makes sense for high-skill jobs also.
  • Author: Siva
  • Last updated: August 7, 2022
  • 5 Minutes
work or job outsourcing at small and medium businesses and workplaces explained by Papershift

Every company that wants to grow needs to refresh its workforce on a continual basis. Sometimes, however, internal hiring can lead to higher expenses. From office space, furniture, insurance, utilities, and other labour costs, hiring staff to work within your organisation can be a costly endeavour. This is where outsourcing come in.

Outsourcing is a good alternative to hiring an internal workforce. It helps companies keep expenses to a minimum while giving them access to a skilled workforce. 

But what exactly is outsourcing and how do you weigh up its pros and cons? In this guide we will answer these questions and many more. 

Let’s begin.

What is outsourcing?

Outsourcing is where a business hires a consultant, an agency, an external service provider, or a freelancer to handle a variety of business tasks or work on specific projects.

Outsourcing can involve external companies working on a company’s behalf, part-time freelancers or contract workers hired through a consultancy, agency, or external service provider.

How do you choose what tasks to outsource?

When deciding which process to outsource, a business needs to ask three questions:

  • Will it save the business time?
  • Will it cut costs?
  • Can a freelancer do a better job?

There are certain essential but time-consuming tasks in every company which are repetitive in nature. These include things like:

  • Data entry
  • Competitor research
  • Database building. 

These types of repetitive tasks can easily be outsourced to free up time for in-house staff to focus on more important endeavours. 

Other tasks might require specific skills, such as:

  • Financial analysis
  • Website development 
  • Advertising

Hiring in-house staff to accomplish these tasks could be expensive and unjustifiable if work is sporadic. Outsourcing to specialized agencies or freelancers can save money while bringing the required skills to the business.

What specific tasks can be outsourced?

Certain tasks have fundamental characteristics that make them ‘good’ for outsourcing. In this section we will discuss a few in a little more detail.

Social media presence

It is impossible to grow a brand, connect with an audience, or find clients without a robust social media strategy.

Businesses can outsource the task of creating and scheduling social media posts on a day-to-day basis to freelancers or virtual assistants. They can create reports based on performance data and provide recommendations. 

Social media tasks can get overlooked by business leaders since their importance is not as vital as account management, product development or sales. Outsourcing social media functions can give these tasks the attention they deserve.

Market research

Freelancers can often do simple research for different aspects of a business like identifying potential customers, finding industry events that might be good to attend or gathering market data.

This type of research is usually tedious and time-consuming and may prevent a business owner from focussing on running their business.

Content creation

Another time-consuming activity geared towards building a company’s online presence is maintaining content on a website or blog. To provide increased value to potential customers, businesses often need to invest in regular blogs, articles, and infographics.

Unless a business has the money to invest in a dedicated in-house content creation team, freelancers can be hired to be a cost-effective way to write and edit content.

Finance and accounting

Businesses have been outsourcing finance and accounting for years. This is usually because external agencies or consultancies can provide greater expertise in areas like budgets, forecasts, payroll, taxes, and internal audits.

Personal assistance

Virtual Personal Assistants can handle all the mundane daily tasks of a business, like scheduling appointments, answering calls, or booking tickets. This can give you more time for important tasks or even to create a healthy work-life balance.

Customer service

Customer service can be an expensive task for many companies. As a business grows, it needs larger customer support departments to connect with clients and resolve issues. 

Outsourcing customer service to external agencies can provide businesses with increased consumer satisfaction without incurring a huge cost.

Human resources

Statistics show that almost half of all business outsource their HR department. Human resources can be a black hole of resources, especially for new businesses. External agencies can help businesses with tedious and costly HR tasks while freeing up staff to deal with more important issues. 

What are the pros of outsourcing?

There are many benefits to outsourcing, these include:

Costs are reduced

This is by far the most significant reason for companies to outsource to outside talent. In many cases, it is cheaper to hire a contract worker than employ internal expertise.

When you hire a remote worker, you don’t have to:

  • Pay costs of relocation
  • You don’t have to offer the same benefits you would to in-house staff
  • You don’t have to increase office space

You have access to a global pool of talent

Another pro of outsourcing is that companies have access to the best talent available for each task. No matter who you are looking for to fill a position, you will be able to find them. Moreover, you’ll often be able to find them at a rate that is much cheaper than it would cost to bring someone in-house or skill up a current employee.

Less downtime

Outsourced workers will often work longer hours than an in-house team. These may even be at times when your normal staff are unavailable. 

What are the cons of outsourcing?

While there are many pros to outsourcing, there are a few cons to consider too. These include:

Frequent delays in work deliveries

The one thing that businesses learn when outsourcing is that work is a generally delayed. This is often due to miscommunication, a communication lag, inaccuracies with work requests, as well as many other reasons.

Privacy concerns

Outsourcing means entrusting your own intellectual property and customer privacy to people you don’t know. 

In the event you do want to outsource, you need to make sure you implement clear protocols for preventing privacy issues occurring.

Freelancers can be expensive

In most cases, hiring a freelancer will be cost effective. However, there are instances when freelancers might be pricier than if you hire someone in-house to complete a project.

This is often the case when the freelancer has specialized skills that aren’t easily attainable.

Communication can be difficult

No matter how good your video conferencing or teleconferencing software is, it is more difficult to communicate via the Internet or phone than it is face-to-face. This can make it time-consuming to relay information to outsourced teams.

In conclusion

Outsourcing can be vital for many businesses but expensive if you don’t know what you are doing. 

We hope you have enjoyed this guide. For more useful workplace information, check out the rest of our website.

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Written by Siva

I write & describe the value & benefits delivered by Paperhift's rota planning, staff time tracking, and employee payroll management software. Especially useful for Shift Planners, Rota Managers, Team Admins, and HR Teams :-)