Around 300,000 jobs in the United States are outsourced annually, with cost reduction being the number one reason for this business solution. Though it is mostly large companies who outsource, 24 percent of small businesses also outsource certain services to boost their business performance.
As businesses have become more complex and modernized, the need to outsource has become more apparent. More than just farming out areas in which you do not excel, outsourcing has become important for core competencies, too.
Apart from cost cutting, there are other advantages in outsourcing certain business tasks of your company.
Why Outsourcing Is Necessary for Your Business
1. It allows you to focus.
Among the vital areas of business are marketing, leadership, management, and finances. Though it is tempting to support each area with an in-house team, you will eventually see some disadvantages.
To prevent setbacks, your business should pick its main strength, while an outsourced team should handle other responsibilities.
2. You get help from experts.
When you outsource certain tasks to other firms on a daily basis, such as an accounting or IT outsourcing company, you are ensured that they are using the latest and more relevant metric in the services they offer.
With their continued educational pursuit in their respective fields, you are certain that they are competitive. Thus, they can provide you with top-notch service.
3. You can generate more money.
Building your own in-house team means ramping up and managing them. It equates to spending money and time. But when you invest in an outsourced team, they show up regularly and deliver the product or services you demand.
Say you are a small construction firm. Renting a forklift is more cost efficient than purchasing one outright, especially when you are just starting.
Crucial Tasks to Outsource
1. Legal Service
Legal services should be the first business aspect that should be outsourced.
When starting a business, you immediately need the help of a lawyer in securing licenses, permits, business incorporation, and other legal matters. Throughout your enterprise’s lifespan, you would need legal counsel.
However, keeping an in-house lawyer can be expensive. Though it is reasonable to hire an in-house counsel if you have plenty of legal work at hand, this would not be practical if you are only running a small business.
An attorney’s hourly rate could range from $343 to $727. In some prestigious firms, they charge as much as $1,500 an hour. Unless your business requires constant legal concerns, it is best to outsource this type of service.
2. Accounting and Payroll
It is only practical these days to outsource the financial aspects of your business, which include accounting, bookkeeping, and payroll.
Bookkeeping allows your business to stay on track with its finances — and this is vital. However, it would mean additional expenses when keeping a whole accounting department on the payroll. Moreover, you have to allocate time and other resources to keep abreast of the ever-changing tax laws.
Payroll management also becomes tedious as your team grows bigger by the day. Similar to accounting and bookkeeping outsourcing, farming out the payroll task of your company allows you to dodge the cumbersome task of keeping track of the latest wage and tax laws.
3. Human Resource
Another important task in your organization that has to be farmed out is hiring and recruitment. You consume a lot of time, energy, and money posting for job vacancies, screening applicants, conducting interviews, and doing background checks.
These days, though, a number of external human resource agencies provide expert services in screening suitable applicants. On top of that, these agencies are up-to-date with current employment standards. You can then allocate your time in creating strategic efforts to boost sales, which, in turn, increases the bottom line of your company.
4. IT Services
Information technology (IT) services are one of the most widely outsourced business processes.
Admittedly, not all companies are tech savvy. Thus, it is best to allow someone to help your organization with any technological needs. It could be for any tech-related tasks, such as data entry, web designing, programming, data storage, and cybersecurity.
Though securing IT services is not that cheap, investing in this is worth it in the long run. Cybersecurity threats have been a pressing issue recently, so having an expert manage to keep your data and information safe is crucial.
As your business grows bigger, you would need to outsource more tasks apart from those we have discussed.
Before settling for an outsourcing company to handle certain office tasks for you, it is essential that you conduct a thorough background check to ensure you are getting the best quality service out there.