Making use of a third party to complete outstanding work within a business is known as outsourcing. It is a popular solution for a multitude of businesses, across many industries, for a range of reasons. Whilst reducing operational costs within a business will always be one of the biggest factors for doing this, there are a few other reasons why it may be something to consider.
One of the most advantageous reasons a business may want to outsource is the fact that it is often cheaper to do so, be it temporarily or on a permanent basis. Industries that are commonly outsourced include accounting, researching, market analysis and customer service. Companies that do not outsource these jobs, often have considerably higher expenses in these departments – a cost which can often be passed on to the consumer.
Built off the back of what was once simply a third party helping out a business, an entire industry has now evolved. On an international level, much of the outsourced industry is frequently located across Asian, from call centers in the Philippines to research facilities in India. Assisting with increased efficiency and cheaper labor costs enables businesses to start new projects sooner than they may have been able to. This, in turn, allows for quicker and more organic growth.
Outsourcing does not always have to be on an international scale either. A business may outsource cleaning staff or outsource an accountant as and when their services are required. This would work out cheaper than having a permanent member of staff for the same job, especially when the work demand is just not there. A great example of this type of employment working well, is through the hiring of freelancers.
As there are literally less bodies to house within an office, small businesses can also have more compact workspaces, with less square footage resulting in cheaper building costs and even reduced utility bills.
Outsourcing is not simply a way to save money. As a company develops and tries to expand, outsourcing is an innovative way to bring new skills into a business. Additional people bring with them new solutions and offer alternative perspectives, which can be fantastic for company growth.