Sometimes, hiring full-time staff and adding them to the monthly payroll, even when there is less work, seems like throwing money out the window for most entrepreneurs. Today, many businesses in Africa have smartened up and hopped on the outsourcing practice for cost-saving and streamlined operations.
This article has all the details you need to know about outsourcing. Let’s begin by answering the common question, “What is outsourcing?”
What is Outsourcing
Outsourcing is a business practice where a company contracts an external professional to execute specific tasks, operations, or activities on its behalf for a certain time. Outsourced jobs are temporary. You could refer to them as “gigs” as well.
While there are specific organizational roles that are relevant, like desk office, it has become widespread practice for companies to entrust specific tasks or an entire departmental function to external experts. Jobs related to technology, M&E, social media management, and accounting are commonly outsourced. This practice extends to customer care services and manufacturing processes.
These external professionals can range from freelancers to specialized organizations, depending on the nature and scale of the tasks involved. Outsourcing offers businesses the flexibility to tap into expertise when needed without the long-term commitment of salary payments.
The Benefit of Outsourcing
Managing full-time employees with fixed monthly salaries can be an enormous financial burden, particularly for startups with limited cash flow. The labour market often dictates a fixed cost for professionals, demanding salary payments to full-time staff regardless of the state of your business’s revenue, even if their workload is light or nonexistent.
Outsourcing offers a solution by allowing business owners to pay for the hours spent working, contrary to the fixed costs associated with full-time employment. For instance, hiring permanent staff for a one-time website development task may not be necessary, as once the website is completed, the ongoing payments become burdensome.
Aside from reducing costs, hiring a third-party professional to work on critical areas allows you to focus your time and energy on tasks within your expertise. There are situations where your business might have numerous responsibilities that don’t align with the skills of your employees or yourself. In such cases, all you need to do is temporarily hire an expert to handle the work for you.
Also, in situations where you face challenges in managing finances, providing customer service, and completing paperwork tasks, outsourcing these specific responsibilities allows you to concentrate on your primary goals.
When Should Businesses Outsource Their Work
Businesses should consider outsourcing when their primary objectives are;
Focus on More Pressing Functions
Divided attention can prove ineffective. By outsourcing other work functions, businesses can direct their internal resources, expertise, and time toward core missions and concentrate on their most crucial activities.
Access to Specialized Skills
Even though your in-house team is efficient, everyone has their unique strengths and limitations. There are cases where you might need specialized experience from skilled experts for more practical tasks that the in-house staff can’t carry out. This saves time but also enhances overall productivity.
Outsourcing can create additional time for businesses to prioritize core activities, redirecting valuable time-consuming tasks like bookkeeping, accounting, and social media management to third-party professionals.
Reduce Infrastructure Expenses
Many outsourced professionals work remotely, eliminating the need for extra office space and equipment. This cost-saving measure can help businesses cut expenses related to office space, furniture, and equipment, which may be needed to accommodate a growing team.
Quick Growth Challenges
For startups and emerging businesses, there’s a delicate balance to strike. On one side, there’s the worry of not having enough demand for your product or service. On the other hand, there’s the risk of growing too fast and needing extra hands to meet customer needs, causing delays and other problems.
When you find yourself in this situation, it’s a signal to consider outsourcing specific tasks or processes. Instead of worrying about the added expenses, see them as investments in your business’s future. A larger team can help you expand your production or services, reach more customers, and increase your revenue over time. It’s all part of an intelligent strategy for steady growth.
Meeting Project Deadlines
In situations where internal staff may struggle to meet project deadlines due to limited resources or too many responsibilities, outsourcing for additional assistance can be a more timely and efficient approach to hastening the project completion process.
A notable example of this approach is frequently observed in website development firms, which often employ contract staff or freelancers to meet strict project deadlines.
How Businesses Can Outsource Their Work
Outsourcing is a relatively common practice, but its popularity doesn’t mean it’s an effortless work style. To enjoy the maximum benefits and satisfaction that outsourcing offers, businesses should ensure they understand all the nooks and crannies and map out their industry’s strategic approach.
Step-By-Step Guide on How to Outsource Work for Maximum Productivity
Identify Core Functions
Define your core functions as a business within your industry. Focus on activities crucial to your field and hire in-house teams for these core tasks. For instance, a human resources company’s core functions include staff recruitment and evaluation services.
These functions should have in-house teams. Non-related tasks such as website development, customer care services, and account bookkeeping can be outsourced.
Identify Non-Core Functions
Recognize non-core functions that can be delegated to external professionals or service providers. These tasks may encompass IT support, accounting, customer service, content creation, digital marketing, and more.
Clearly state the reasons for outsourcing. Objectives could range from reducing continuous labour costs to acquiring expert skills and improving time management. Having well-defined goals is crucial for establishing a successful outsourcing strategy.
Choose the Right Outsourcing Partner
With a multitude of options, selecting the right outsourcing partner involves some risk. Research and carefully select a partner who aligns with your objectives. Look for experienced and reputable service providers, check references, review past experiences, and assess capabilities.
Online platforms like Upwork provide tools to research and choose the right freelancers for tasks, considering their work history, expertise, and client reviews.
Before assigning tasks or making any payments to third parties, establish a clear and comprehensive contract agreement. The contract should outline the scope of work, responsibilities, deadlines, payment terms, and other essential project details. It helps minimize risks and prevents future conflicts that may arise during the relationship.
Consider including a Non-Disclosure agreement to protect confidential tasks. If possible, involve a lawyer to draft and sign these agreement terms to avoid potential pitfalls.
Establish seamless communication channels with your outsourcing partner, mainly if they work remotely. Effective communication is essential for a smooth business transition between both parties.
With effective communication, businesses can keep up with outsourced partners’ progress. Strategically and successfully outsource non-core functions, ensuring their resources are effectively allocated to core activities while benefiting from specialized expertise and cost efficiency.
Implement quality control measures to monitor the performance of your outsourcing partner. Define key performance indicators (KPIs) to regularly assess the quality of the work delivered and provide feedback for improvements as often as possible.
Set up a Review and Feedback Mechanism
Establish fixed review dates and schedule regular weekly meetings to keep a close eye on the progress of your outsourced work. While flexibility is paramount in outsourcing, maintaining a structured review process ensures that your project stays on track and aligns with your objectives.
Implement an effective feedback system to facilitate efficient tracking of the work. This allows you to provide constructive input and guidance to your outsourcing partner, ultimately enhancing the quality of the work and achieving your desired outcomes.
By following these outsourcing tips, businesses can enjoy high-quality operations, save costs, get more work done in less time, and focus on their essential functions. Outsourcing offers you a competitive edge as well as a flexible approach to managing project deadlines and unexpected challenges.
Outsourcing is a smart move for businesses looking to save money, offer top-notch services, and stay focused on what they do best. It should be applicable to solution-driven business in today’s fast-changing business world.