Outsourcing has become an effective way for small and medium-sized enterprises (SMEs) to streamline their operations while saving costs and increasing productivity.
In 2019, the market value of the global outsourcing industry amounted to US$92.5 billion. Experts predict year-on-year growth, too.
In this article, we’ll discuss some important things for you to consider before hiring an outsourcing firm. We’ll also talk about the steps you should take to determine if your company is ready to work with third-party contractors.
1. Know why you want to outsource
This is an important step you should take before working with a third-party contractor. Your reason should be anchored on the idea that you can make more money by outsourcing than by not outsourcing. That said, it helps to identify the areas where you can improve your efficiency and generate more revenue by outsourcing.
To do this, make a list of common tasks. Assess how the time is being spent and adjust based on what the data tells you.
Also, identify the tasks your company is not very good at. With outsourcing, you’ll be able to have these done by someone more adept at them. This means you won’t have to worry about your employees not understanding the responsibilities a job entails.
2. Know what to outsource
With so many qualified professionals working as contractors and freelancers, you can outsource almost any task these days. However, this doesn’t necessarily mean you should.
The most outsourced tasks can be divided into three categories. The first one refers to highly repetitive tasks, such as taking and processing orders, data entry, and inventory. Most customer support outsourcing companies provide these services.
The second type includes tasks that require specialized knowledge, such as financial analysis and forecast, which may need to be performed by certified financial analysts.
The third category covers assignments done by highly skilled workers. An example of this is when you do not hire an in-house chief technology officer (CTO) and instead contract a CTO-level person to come in a few times each month to provide expert insights and assess if your IT department is handling your network efficiently.
3. Identify the right time to hire a third-party contractor
The right time to outsource is different for each company. Some businesses have in-house employees to handle daily activities but may need third-party agents to work on new projects that do not necessarily require hiring a full-time employee. When you are unable to manage your business’s day-to-day operations and might be losing potential revenue in the process, it may be time to consider outsourcing.
For instance, if you run a retail enterprise, you’re aware that efficient order-taking and processing are essential to sustaining your customers’ loyalty. As your business grows, you’ll need an extra pair of hands to attend to your increasing buyers. In this area, e-commerce outsourcing can help manage additional tasks.
4. Be aware of the legal requirements
In deciding to contract third-party workers, complying with regulations should be one of your considerations. Be aware of the relevant laws that govern your business, like labor, data protection, consumer privacy, and other related local and international policies. The provisions of these statutes may have implications on your business.
For instance, labor issuances might provide specific minimum wage rates. In this regard, you should be able to tailor your compensation table based on the prescribed legal standard.
5. Choose carefully
When choosing a third-party contractor, consider looking for established firms. You’d like to be sure you’re entering into a partnership that can help you increase your revenue. This is how SMEs can grow with outsourcing.
Whether looking for a financial analyst, writer, or any other expert, many business owners fall into the trap of just going with the first option they come across. But what you should do is spend more time selecting your potential service provider. Rather than rushing things, treat outsourcing like a partnership by doing thorough research and assessment.
The level of expertise and understanding needed for the tasks you want to turn over is also a crucial factor, that’s why it’s important to choose a company you truly trust.
Make the right call
Outsourcing is an effective way to enhance your company’s efficiency while maximizing your overall productivity.
In deciding to work with an outsourcing company, it pays to carefully assess which firm you’d like to work with, taking into account its reputation and your organization’s needs and priorities. After all, you’d like to keep the costs down while improving your core business processes.