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Why do companies choose to outsource work?

Intro

Outsourcing can be a bit of a dirty word.

To customers, it can be synonymous with bad service.

To politicians, it can be synonymous with the loss of domestic jobs.

However, these stereotypes only prove true when outsourcing is done poorly. The truth is, there are lots of great reasons for outsourcing. In fact, when done ethically and with a bit of common sense, outsourcing can be a great asset in skyrocketing your revenue.

What is outsourcing?

Outsourcing involves a company contracting out a defined portion of their workload to an external individual, company, or service. While arrangements will vary, the company will not bring the contracted professional onto their payroll. Instead, individuals are paid for delivering the specified outcome on a project-by-project basis.

Why Outsource?

The stereotype of outsourcing is that it happens when a company is trying to cut costs (and they don’t care about the corners that get cut in the pursuit of that). However, while outsourcing does generally save money, there are many other reasons it could be a good option to incorporate into your business model.

Outsourcing:

1. Allows you to lessen the time and cost required to train new personnel.

Generally you’ll hire people who are already experienced professionals in the area you’re looking for, and furthermore, they won’t be required to have completely comprehensive knowledge of your company when their work is limited to a single task. They may still need a bit of orientation to completely understand your company’s ethos, but it will be much less than that of a regular employee.

2. Allows you to benefit from the expertise of professionals who have worked with other companies just like yours.

You may be hiring someone to do a task you just wanted off your plate, but who knows? They may bring some great ideas to the table and have a bigger influence on your company than you anticipated. Plus, extending your network and developing good professional relationships never hurts.

3. Can allow you to find fabulous talent that you end up bringing on board full-time.

The intent of outsourcing is generally to avoid having to hire more full-time staff. However, it’s likely that bringing in temporary help will allow you to scale to a point that you actually can bring more people on permanently. When you find your company in this position, you’ll have a full roster of people you’ve tested out and will be on pretty good footing to build an all-star lineup.

4. Can allow you to leverage the power of superstars when bringing them onto your team full-time isn’t an option.

Maybe there’s a superstar blogger in your field, and you know they already have their own brand that they’re invested in, or the salary you could offer them wouldn’t be tempting enough. Sometimes you can still recruit these superstars for a one-off job that allows you to leverage their influence and introduce yourself 

all by myself gif

to their entire audience.

5. Eases up your workload and allows you to focus on what you do best.

Maybe this sounds like an obvious one, but some people still don’t seem convinced. There are so many one-man-bands out there that burn themselves out trying to do everything, when bringing in a service or a couple people to take care of some of the work is much easier than you’d think. Furthermore, while some people are leery to dish out the cash, bringing on extra people through outsourcing actually allows you to scale your company and bring in more revenue, working out to a stronger bottom line in the end. In other words, you get to keep your sanity, and bring in more dollars while you do.

6. Is a great way to increase people-power in heavy seasons or during projects where you expect more opportunities.

While some industries have set precedents for seasonal workers, not all do. Whether yours does or not, outsourcing is actually easier anyway. Because the tasks of outsourced workers tend to be quite tightly defined, you get all the benefits mentioned above (easier/cheaper training, takes specific tasks off your plate and allows you to focus on your forte, etc.). With the seasonal worker, lines can be a bit blurry. They may require more time and money for orientation, and there will be a greater adjustment after they leave as well.

Common Myths of Outsourcing

Myth #1: Outsourcing is only for select types of work.

A decade ago, the outsourcing stereotype was limited to call centers overseas. Things have come a long way since then. These days outsourcing is available for virtually any task you can think of.

Myth #2: The whole point of outsourcing is utilizing cheap labour overseas. The ethics may be questionable, communication may be hampered by time differences, and these workers never feel fully integrated into your work.

There are still many opportunities to outsource overseas, and, to be completely honest, some may indeed have questionable ethics. However, there are also really great partnerships to be formed that build up both parties in a fair and equitable manner. This is, admittedly, sometimes challenging to assess when you never get to meet in person. For those who feel a bit squeamish about all this, there are still outsourcing options available. As the freelance economy grows, many companies can find people to outsource work to right in their own city or state. Sometimes you can even arrange a face-to-face meeting, or bring these workers into your building to meet your team. 

Myth #3: Outsourcing makes the most sense for big corporations.

Outsourcing can involve hiring a fleet of people to take over an entire department, or it can involve simply contracting a sliver of your overall tasks to an individual or service. The second scenario is especially common (and helpful!) for one-person operations who are feeling overwhelmed and/or looking to scale their operations.

Myth #4: Outsourcing inevitably leads to a drop in quality.

Unfortunately, outsourcing horror stories do exist. If outsourcing is new to you, and you don’t have the right tools or procedures in place, quality control can be a bit of a challenge. Generally this comes down to two issues: 1) hiring the right people, and 2) communication.

When deciding who to outsource to, make sure you choose a trusted expert. You want someone who has repeatedly demonstrated professionalism and who has verified positive reviews of their work.

While it’s often cheaper to go for someone with less experience who’s just trying to get their start in the industry, unless you have good reason to trust their work, it’s generally better to invest a bit more to go with someone you know you can depend on. These people also often do better work simply based on their length of time in the industry, and their more refined idea of how to deliver value and results.

Alternatively, you can go with an outsourcing service. This doesn’t necessarily guarantee you the results you want (there are good and bad services just like there are good and bad freelancers). However, if things go wrong, there’s a larger team and management that you can call to fix things. Furthermore, an individual can flake or have something happen in their life so that they’re unable to meet your deadline; if this happens to an individual within an agency or service, they’ll make sure someone else steps up and your work still gets done.

When choosing an outsourcing service, it’s best to choose one that you can develop a relationship with over time. At Vendasta, you’re assigned a fulfillment specialist who you will work with consistently. When using your fulfillment specialist on work for your clients, you can even connect your specialist with your client under your banner. In other words, because all Vendasta’s services are white-labelled, your client can talk to the person who’s building their website, writing their blog, or designing their logo, and all the while they’ll think they’re talking to a member of your staff.

 

READ MORE: See how Vendasta Marketing Services compares to using Upwork

 

Once you’ve decided what route you’ll go for outsourcing, it’s time to delegate your work.

When communicating your assignment with your hire, it’s generally better to give more guidelines rather than less. If you have written or visual examples for the tone or style you’re expecting, find and include those. If the professional is someone you’ve worked with several times, someone who has proven themselves to you and who has a good idea of the quality and tone you expect, then you can give them a bit more creative freedom. However, regardless of how long a person has/hasn’t been with you, make sure you articulate your desired outcomes. Give an approximate word count or other technical requirements you expect. Don’t just assume the hire will give you something that will work. They can’t read your mind, and the work they’ve done for other people may have had completely different parameters. Visualize exactly what you would like and outline that in detail in the assignment’s description.

Conclusion

While outsourcing isn’t for everyone, it does fit more business profiles than some would expect. Particularly in the case of the up-and-coming business or agency, there are many opportunities for outsourcing that look completely different from a decade ago. Taking advantage of these opportunities may be exactly what your business needs to thrive, scaling far faster and further than you would if you managed all the work on your own.

About the Author

Courtney is a Content Marketing Specialist at Vendasta who loves spending her days researching and writing about...anything really, she's honestly a pretty big nerd. When she's not blogging up a storm, you can find her collecting too many instruments while only half-learning to play them, watching too much Netflix, or planning a trip to visit all the friends she's left behind everywhere she's lived in the past decade.

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