In-house and outsourced talent both have advantages, and a successful company will inevitably use a little of both. You’ll want full-time, in-house employees you can rely on for these elements that you’ve built your brand around. However, your team may not be experts in many aspects of your business, such as back-office accounting, IT, or marketing. As many other businesses have discovered, outsourcing may be your wisest solution in these cases.
A 2019 study found that over a third of small businesses outsourced some of their operations. Outsourced IT services alone reached $85.6 billion in 2019. For this, many of them turn to business process outsourcing (BPO) services. These services allow you and your team to spend more time on your core business functions and leave those critical back-office functions to experts outside the organization. The key for any business is knowing when and for which roles to use outsourcing. As president and CEO of Global Virtuoso, I use a model whereby some job functions, such as those on the technical side, are in-house and outsource areas like digital marketing.
Three vital factors in deciding between in-house hiring and outsourcing are cost, flexibility, and growth. These will often be the key differentiators in deciding which path to choose.
Length and Size of the Project
Maybe you have a short-term goal for which you’ll only need the talent for a few months for a one-off project. Outsourcing can be useful when you don’t have a long-term need for an employee you’ll need to pay medical benefits and contribute to a 401(k) plan for. When you outsource, you can quickly find talent online using companies that specialize in these areas. Your project will get completed quicker, allowing you to get your product on the market sooner. Additionally, consider that you may not have 40 hours of work to offer 1 employee. Maybe you only need 20 or 30. It’s smarter to outsource those 20 or 30 hours than to pay someone a full-time salary to do the same thing.
Scope of Work and Flexibility
Outsourced experts should already have the technical knowledge and ability to assess a business’s strong and weak points from day 1. They may specialize in many areas like Web design, search engine optimization (SEO), or marketing. Of course, some of these freelancers can be expensive. The top software engineers, for example, can cost up to $300 an hour. However, remember that you can source these freelancers from anywhere in the world, capitalizing on the strength of the dollar to take advantage of different prices for freelancers in different countries.
Growth
How big is your business, and how quickly are you growing? Having solid financials and managing cash flow are difficult but vital elements for a business in high-growth mode. For instance, an in-house accountant at a smaller company may perform roles from entry-level bookkeeping to high-level financial strategizing. But there’s no reason for a C-level executive to perform basic tasks, just as there’s no reason to pay an entry-level employee to make high-level financial decisions. An outsourced person or agency can cover all of these tasks at a rate that matches exactly what it’s responsible for.
Your most valued in-house employees are there for forecasting, strategy, and big-picture thinking and can help you focus on the future of the business. Outsourcing can be a key tool to having the right people in the right roles. They can get projects done quicker, lower costs, and increase overall growth.
Dr. Anthony Decoste is the President and CEO of Global Virtuoso, an outsourcing company that specializes in the delivery of BPO services, accounting, finance, and aviation support services for businesses of all sizes. He has over 20 years of international management experience and has a proven track record of helping companies cut costs and improve efficiencies.