More companies are discovering the benefits of outsourcing. By 2027, the Business Process Outsourcing market will be worth $405.6 billion, according to Grand View Research Inc. A boost in productivity, reduced operational costs, and more time to focus on better leadership are all great perks of utilizing outsourcing in your business. However, if done at the wrong time, it can also lead to loss of control, a decline in product quality, and less flexibility as a business – all key when operating a successful business. So how do business owners distinguish between outsourcing and expanding in-house? Picking up on a few tell-tale signs can help businesses not only decide when to outsource, but also whether it is the right move for them and the business functions they should be contracting out.
Is There An Expertise Gap Or Lag In Your Business?
A great benefit of outsourcing is that it allows businesses of all sizes to gain access to specialized talent without the payroll salary tag. Too often, businesses may find themselves experiencing a workforce skills gap or a needs-skills mismatch. Your business may be gearing up to enter an unknown market or tackle new growth challenges, or in some cases, it may be experiencing a skills shortage due to the market changes.
When this happens and managers find that their employees are lacking the skills needed to get the job done, they often have two options: recruit talent in-house, or outsource the task to an expert who knows it well. Recruiting in-house comes with a higher and longer-lasting price tag, and it can take up to 48 days to fill a vacancy. Outsourcing gives a more cost-effective option – particularly for one-off projects or short term needs.
Is Your Production And Workforce At Its Capacity?
Some managers may be tempted to share the increasing tasks within their current workforce and operations in a bid to increase efficiency and ROI. However, this can often lead to employee burnout, plummeting productivity, and missed deadlines. Overworked employees and assets can also lead to low team morale and poor employee mental health, and distract employees from their intended duties. For instance, some law firms have employed subcontracting during C-19 for marketing and administrative tasks in their legal practice, which has left them free to focus on adjusting their legal services to changing needs. If you find your business lagging on production or goal deadlines and your workforce is already working at its full capacity (full-time staff/overtime), then it may be time to consider outsourcing part of your business functions.
Is Your Business Scaling Up Plan Kicking Into High Gear?
Once established, a common goal for most businesses is to grow. Rapidly growing businesses can experience challenges such as operational efficiencies and loss of control over costs. If this is the case, it is a sign that your business may be better off outsourcing parts of its expansion. This allows the business to focus its assets on key parts of its growth plans, rather than overextend itself. Also, outsourcing elements like marketing and web design to experts heightens your business’ chances of succeeding. Additionally, if your business is expanding, you may find that routine tasks are increasing – and taking up much more of your workforce’s working day. In this case, outsourcing repetitive tasks can leave staff free to focus on other duties, and in some cases, work out to be more cost-efficient.
The key lies in finding the right time to outsource for your business. Making the right call at the right time can open up many doors with outsourcing.
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