Although the majority of business owners rely on their capability of multitasking to get as many things done for their business, research has shown that humans have a finite capability of juggling multiple tasks at once. And doing so could even hamper your brain functioning.
One of the best ways to counter the daunting prospect of multitasking and ever-increasing business-related responsibilities is to farm out some of your company’s tasks to experts. With almost everything leaning on digitization, more companies prefer to outsource to fill gaps in their business process.
2017 data showed that the total market worth for outsourcing service reached a remarkable $88.9 billion rate. It is projected to increase to $405.6 billion by 2027, Grand View Research, Inc. said. There are several reasons why companies prefer to outsource tasks, whether core or non-core, which we shall delve into further.
Outsourcing: A Definition
Outsourcing is the practice of a business to hire an outsider to perform tasks that the company’s own staff and employees traditionally do in-house. It covers a wide range of jobs, from human resources to security, or from manufacturing to marketing.
Farming out of workers was first popularized during the late 80s and early 90s to resist the increasing labor costs and expanding global market. In the later years, it was recognized as an essential aspect of business economics. Several controversies are surrounding the topic of outsourcing in different countries.
Those who are against it contends that such business practice caused significant loss of jobs on a domestic level, while those who are in favor of it asserts that it fosters that free-market nature of economies on a worldwide scale, and it helps companies recognize aspects of their business that need more resource allocation.
Predominantly farmed out streams include IT operation, legal, marketing and lead generation, content development, manufacturing, logistics, and customer support. Companies usually outsource bookkeeping functions as it is critical for a business’s survival, however confusing.
Advantages of Outsourcing Essential Business Processes
Give More Attention to Your Core Business
Having more time to focus on your core business is fundamentally the most compelling advantage of outsourcing. You are more productive when you have more than enough time to spend on the aspect of your business you are good at.
In running a business you need to face the fact that you need to handle several tasks and duties which you are not good at. You might not be good with payroll or human resource paperwork. Although skills can be learned, having too much on your plate is likely to slow down your business.
By outsourcing functions to your company, you help your business conserve time and energy on important but mundane back-office tasks. Consider hiring a virtual assistant who can do administrative tasks for you. That way, you could think of more ideas on how to improve your business performance.
Reduce Overhead Expenses
Farming out business tasks enables you to adjust your service consumption according to your needs. Through this business practice, you can cut labor costs and overhead expenses for tasks you do not need all the time.
For example, hiring a WordPress management company is considerably less expensive than hiring an in-house website developer. Having a working website is a must for companies these days as modern consumers expect your business to have a digital presence.
Cash Flow Control
By outsourcing, you can save up from fixed expenditures, such as salary, office rental, and utilities, allowing you to maximize your cash flow so that you could invest it in other areas of your business.
Having ample cash flow allows your company to adapt new business ideas with ease as it is not strapped on unnecessary expenses. You could spend the saved amount on streamlining your products, service, or marketing strategies.
Furthermore, investors are more enticed to finance a company that has good money reserves. It goes to show that your business is doing well and less likely to be a risky investment.
Avenue for New Resources
Adding new faces to the team means spending money on recruitment and training. It also carries with it the risk that it might be a useless investment if your new hire resigns after a few months. By farming out jobs, you can save your company from this dilemma.
Outsourcers are people who specialize and are experts in their fields. They also have the required experience your company needs. By hiring their service, you allow your company to benefit from the latest trends and new techniques these outsourcers can provide.
Farming out your business processes is not an easy task. You have to land the right outsourcer who can provide you the best quality service that your business needs. But with a thorough recruitment process and evaluation, you will eventually find a suitable outsourcing vendor.