According to Statista, global outsourcing generates $92 billion annually. One study reveals That businesses typically outsource technical and back-office tasks such as IT services (37%), digital marketing (34%) and accounting (37%).
The American Psychological Association reports on a study that shows multitasking results in a 40% reduction in productivity. By trying to do more, you may be increasing your stress levels without being more productive.
Business Administration
Small companies often hire virtual assistants, especially if they are entrepreneurs or solopreneurs working out of their homes. If you don’t have office space, it’s hard to hire people who can help you grow your business. Enter the virtual assistant. VAs handle everything from processing orders to posting on social media. When you need help with everything, a virtual assistant might be the way to go. Prices for virtual assistants range wildly but if you shop around you can find a great person wear many of the hats you’re juggling.
Marketing
Ecommerce requires marketing channels, web stores, and social media management to build brand awareness and keep customers close. Customization and community are important for today’s online shoppers who are closer to the brands they purchase than ever before.
For many small businesses hiring a full-time PR resource is simply not possible. It may be cheaper to outsource functions such as web design and social media management so that you can grow your business and revenue.
Information Technology (IT)
Many companies and organizations outsource information technology. It’s expensive to keep these tasks in-house. Also, by partnering with an outsourcing firm, organizations gain access to a deep pool of industry experts. Moving this function to variable rather than fixed expenses often makes sense for small businesses experiencing rapid growth.
IT Management
IT managers need to stay on top of the latest trends, and outsourcing this task makes more sense than might be readily apparent. By hiring a firm to manage your IT, you gain expertise in the latest network, help desk, software and hardware technology advances. IT management contractors are seasoned professionals that can offer a new perspective on your business operations and protect your business from data breaches.
Research
If you need insight into your customers or the industry, it might make sense to hire a firm that specializes in research. For companies launching new products or looking to expand into a new niche, research is a critical component to their success. Leave this task to the experts so that you don’t have to incur long term fixed expenses on salaries and benefits. This flexible option gives you the best results at the most cost-effective price. Vet out the organization that you choose to do your research to ensure they can give you what you need.
Accounting/Finance
Small companies may outsource their financial analysis and reporting to a firm that specializes in this function. Alternately, they may hire a contractor to work alongside their existing staff, preparing financial reports for senior management and adding insight into various metrics.
Payroll is one of the most commonly outsourced services with four out of 10 businesses outsourcing the function. However, 60% of small businesses still handle their own payroll. Giving this task to a firm that specializes in payroll can improve your accuracy and free your administrative staff to concentrate on other tasks. And in many cases, it’s much cheaper to outsource the payroll.
When you outsource your financial task, you hand over the hassles of dealing with IRS inquiries and gain the expertise of companies and individuals familiar with tax, employment and other legal concerns. Automated software and online services that reduce your exposure to risk, can save money, improve accuracy and generally help you sleep easier at night.
HR
Seventy-five percent of U.S. SMBs believe hiring freelancers gives them access to top talent and an advantage over their competitors. As many as one out of three Americans already do consulting in some capacity. This means there are plenty of resources to do the job that you are looking for. Freelancing contract workers give companies access to part-time or full-time experts that they can hire on an as-needed basis. This can save time and money and keep projects on task. Virtual assistants are an affordable administrative expense, for example.
Outsourcing lets businesses scale and grow following seasonal patterns without taking on permanent payroll positions they don’t need year-round. Be sure that your legal counsel looks into the proper classification of workers to avoid penalties and IRS inquiries.
Manufacturing
Running a dedicated manufacturing facility is quite expensive. Some companies go offshore but the US has plenty of facilities that specialize in product manufacturing. Many brands outsource manufacturing so that they can concentrate on marketing and sales. Not all manufacturing goes offshore. Many companies choose to keep their manufacturing in the U.S., which still holds 18% of the global market. So, you have a choice between outsourcing offshore or finding domestic partners that allow you to keep your operations close to home.
eCommerce
For eCommerce businesses, hiring a firm that specializes in logistics lets managers concentrate on growing the business, selling their product, and creating merchandising opportunities. Hand over fulfillment, warehouse management and delivery to an outsource firm and you can take advantage of discounts and economies of scale to save money on your eCommerce order, shipping and fulfillment management.
It often also improves the customer experience which can result in repeat sales and higher price per order metrics. Which warehousing and delivery services you use depends on where your customers are.
Customer Support
For smaller organizations, hiring an in-house customer service team isn’t an option due to the logistics involved with finding and outfitting commercial space for a call center or offices. Outsourcing can resolve that issue and improve customer satisfaction.
Profitable Next Steps
COVID-19 has changed the business model, perhaps irrevocably. Fortunately, technology makes it possible to increase productivity and grow your revenue by outsourcing various functions. As a business owner, outsourcing is a great tool for adapting to the new business normal.
