How businesses can make use of outsourcing services to survive difficult economic periods
The concept of outsourcing emerged in 1950s, but it became a well-recognized business strategy in the 1980s. Ever since, its benefits have continuously remained appealing to businesses of all shapes and sizes.
Whether your business is still in its start-up phase or well established, the overall economic climate can have a lot of impact. Outsourcing has proven to be an important business move, especially when a company is battling both internal and external economic difficulties and cannot afford to hire full-time employees or executives.
Here are some ways that outsourcing can help you and your company through challenging economic times:
Timely and Cost Effective
As a business, time is of the essence during a recession because it is then that money can be lost faster than it is made. During such a time, 70% of your time should be spent on activities that grow the business.
By focusing on growth strategies, the business can adapt quicker to market conditions. The only way to free-up time in a cost-effective way is by outsourcing certain business needs and tasks that do not form the company’s core functions. Such tasks include administration, IT management, and such depending on the industry you operate in.
A good outsource service provider has the resources to start a project almost right away. Handling the same project in-house might involve taking weeks or months to hire the right people, train them, and provide the support they require.
And if a project requires major capital investments (such as building a series of distribution centers), the startup process can be even more difficult. The difference between the costs of outsourcing and that of handling a project in-house may be what saves a company during a difficult season where every move the business makes is crucial for its survival.
Allows for Better Flexibility
From the Covid-19 pandemic, we have learned that one does not have to be physically in the office to be able to carry out certain duties, presentations, and meetings.
Outsourcing is advantageous in these kinds of settings because a company can have access to a wide range of talent and skills globally at the fraction of the costs it would incur by hiring office-based employees.
The recruitment and inducting of new staff members for short-term or peripheral projects can be very expensive; meanwhile low-cost or temporary workers don’t always live up to your expectations. Outsourcing allows a business to direct its human capital and resources toward priorities functions.
By outsourcing virtually, a business has more flexibility to focus on growing revenue.
Reduced Investment Risks
Every business investment carries a certain amount of risk which becomes a threat during uncertain economic times.
Markets, competition, government regulations, financial conditions, and technologies all change very quickly making it difficult for a business to keep up. Outsourcing providers assume and manage these risks for a business, and they generally are much better at deciding how to avoid risk in their areas of expertise.
Often when a business fails, it is not because they do not make enough money, but it is the mismanagement of key business functions that leads to a company’s downfall.
Outsourcing minimizes the chances of such a thing happening.
Forming Partnerships
Outsourcing is more than just a business strategy; it is also a chance for the business to form a partnership with another company. By doing so, the business may enjoy additional benefits that come with working with the company, for example, discounts on office consumables as well as technical equipment such as computers and servers.
Lastly, in a troubled economic period, businesses need to work together despite their various stages of growth.
However, most small businesses simply cannot afford to match the in-house support services that larger companies have. Outsourcing can help small businesses operate on a larger scale by giving them access to the same level of efficiency and expertise that big companies enjoy.
To learn more about how Leverage BPO can help you navigate this economic storm, feel free to contact us for a free consultation.
