Outsourcing has emerged as one of the best ways for companies to plug gaps in their efficiency and expand their output.
The advent of the internet, freelancer networks and a growing familiarity with the concept of businesses working together for mutual benefit has led to an outsourcing boom.
But does that mean outsourcing is right for your business?
Today, we’ll outline the pros and cons of outsourcing, helping you to analyse whether or not handing off work to others is a benefit to your business or if mismanagement of it puts your enterprise at a disadvantage in today’s modern marketplace.
What is outsourcing?
Outsourcing is becoming an increasingly popular way of expanding and taking on new projects as a small business.
The practice involves farming out services or specialist job functions to a third party — usually a freelancer or a separate agency.
Commonly outsourced projects include creative endeavours such as photography and copywriting, marketing responsibilities such as social media management, and even IT and admin tasks (known as Business Process Outsourcing) including security testing and data processing.
Companies choose to outsource for a number of reasons, with a wide network of local and international companies operating solely as outsourcing outlets for larger enterprises.
Advantages of outsourcing
Let’s start by looking at some of the ways in which outsourcing can benefit your business.
Access to a large talent pool without hiring
One of the main benefits of the digital age from a recruitment perspective is the way the talent pool on offer has grown.
Businesses now have access to an abundance of talented applicants from around the world, with remote working giving enterprises the opportunity to work with people beyond their physical reach. Professionals are diving into online courses, training programmes and even side hustles to improve their skill set and employability.
Outsourcing helps businesses reap the rewards of this development without having to hire staff long-term.
Small businesses, in particular, may not be able to afford to hire talent for new departments long-term, yet are interested in experimenting with new projects. Rather than hiring a permanent social media manager who may be redundant to the business in six months, businesses can test the waters by outsourcing and become more accustomed to what the role requires without missing out on establishing their place in the market.
Hiring is extremely costly, particularly for small businesses still finding their feet. Outsourcing allows these businesses to find their niche and build new relationships (both with freelancers and other companies) without breaking the bank.
Increased speed and quality on projects
Outsourcing is a hugely popular asset in the agency world. These companies often work to tight monthly deadlines, with an emphasis on speed and quality defining much of their output.
Outsourcing massively helps in this case as it allows agencies — and other businesses with similar requirements — to plug gaps in their processes and achieve maximum efficiency.
A great way to get the most out of outsourcing when you’re not working on a huge project is to farm out the elements that slow your business down. Admin, finances and data management are all important processes that can slow the progress of a small enterprise. Staff can become dangerously over-familiar with them and it pulls people away from the work they’ve been brought on for.
When you outsource, these problems are removed from the business and brought back in a healthier state. It affords businesses some relief from tasks that are draining them of their talents and time. This allows them to focus on providing quality work in the promised time frame.
Likewise, outsourcing can be used to bring in dedicated experts who can help finalise new projects faster. Temporarily hiring someone who specialises in graphic design can help you produce a much more visually impressive piece than trying to train an existing member of staff, for example. It means you’re getting a quality piece of work that doesn’t require anywhere near as much editing and even includes creative flourishes you may not have considered.
Tapping into new markets
In 2021, it’s becoming increasingly common for businesses to experiment in new markets with new services.
As enterprises look to add more feathers to their bow to attract new clients, appeal to larger customer bases and latch onto existing trends, the importance of outsourcing becomes clearer.
Outsourcing is an important step in this journey of expansion — giving businesses the chance to learn from experts in their field and realise the logistical reality of adopting a certain service or appealing in a particular market.
Bringing in outsourced talent allows you to provide a service much faster and to a higher quality. This helps you get your new business venture or asset off the ground, giving you time to train staff and develop what’s unique about your service on the job. Building relationships with these freelancers gives you the opportunity to make contacts, win key projects and even hire a talented permanent team member once you’re sure of the validity of the market.
Disadvantages of outsourcing
Now, let’s analyse some of the disadvantages of outsourcing your projects and operations as a business owner.
A lack of control
Outsourcing might lift some of the weight off of your shoulders, but that relief comes with the caveat of relinquishing some control.
In a typical office setting, it’s much easier to have control or at least an overview of what everyone is working on. When you’re outsourcing work though, it becomes harder to achieve a constant overview of how a project is progressing and what problems keep cropping up.
Some freelancers and agencies will be in constant communication with the business they’re working with, while others will commit to radio silence until they submit the work. Either way, it is impossible to get an immediate overview of what is being done. This is something any business outsourcing needs to accept — it’s likely there will be some form of breakdown in communication between even the most vocal partnerships.
Tools such as Slack and Google Hangouts make it easier to monitor projects, but many freelancers and agencies will prefer to be left to their own devices. This can make it hard to communicate changes you require and new ideas you’ve had. Many outsourced talents will prefer to interpret a brief through their own vision, especially in creative industries.
It can be difficult to give up part of your business to someone who doesn’t even work there, especially when you’ve built it from the ground up — and pushing back can earn you the reputation of a client who interferes at every level.
Assuring the finer details
This lack of control can lead to some of the finer details of your business and processes falling by the wayside.
All businesses have their own particular way of doing things. Surprise surprise — the same thing applies to outsourced talent.
Working separately from freelancers and agencies can mean that key details are missed throughout the process, leaving you with piles of editing and fine details to iron out. This is common throughout all kinds of outsourcing, be it formatting issues in data processing or a copywriter not following the house style.
This can be managed to some extent through clear guidelines and communication. However, as we touched upon in the previous point, this is difficult to do while maintaining a strong working relationship.
Potential security risks
Finally, outsourcing comes with some security risks all business owners should be aware of.
We live in a golden age of data protection. Despite this, so many businesses and their staff don’t take basic measures to ensure the safety of their digital assets. Unfortunately, many freelancers and agencies have this attitude too.
Outsourcing work often requires providing entities with your private information, including log-in information. Passing on this information might be essential for the project, but in the wrong hands it can put your operation, your staff and your customers or clients at risk.
This information could be passed on to third parties, used incorrectly or altered. This is a serious issue all businesses should consider and make preparations for before outsourcing work.
The validity of outsourcing will vary from businesses to business, operation style to operation style. It’s not always budget friendly, and if you’re a bit of a control freak when it comes to your business, handing over essential work and new projects to freelancers might not be the best idea.
Outsourcing should never be adopted without prior planning. Farming work to a separate company or individual can have as many negative impacts on your business as it does on your productivity and bottom line. So be prepared and ensure there is a company-wide acceptance of this new approach. If you can manage these elements though, you’ll find outsourcing a relieving and inspiring avenue.