Outsourcing. This is one trend that has changed the way we do business the world over. In past models, the workforce of a company was limited to the skills and talents of the employees in their payroll. But thanks to the idea of outsourcing, companies are now able to harness the expertise and innovation that a wide range of third-party companies or individuals have to offer them.
Outsourcing is not a new idea, but it is only recently that it has become an integral element in business management. As proof of its rising popularity, there are now over 53 million freelance workers in America. This means that you won’t run out of freelancer options when and if you decide to outsource.
But should you join the trend and start outsourcing? In this article, we’ll explore the reasons for outsourcing and how this trend can benefit you and your company.
Top Five Reasons for Outsourcing
Here are the most popular reasons for outsourcing of both global and local businesses, big and small.
1. Cost Efficiency
According to studies, cost reduction is the main reason why companies outsource. This is because hiring a freelancer is more cost-effective than hiring a full-time employee. Despite the higher hourly rates, companies are still able to save up to 20 to 30 percent when they hire a freelancer.
For one, the company has to pay a full-time employee for an 8-hour workday (when they are only productive for 5 hours). On the other hand, a freelancer will only charge you for the time they spend working on your projects. In short, you won’t be billed for bathroom and coffee breaks!
Additionally, you don’t need to shell out company benefits (such as medical benefits, payroll taxes, and a few other miscellaneous expenses) to a freelancer.
If the tasks that have to be completed are not a regular everyday need, hiring a freelancer is the best thing that you can do. After all, the freelancer will just carry out the task assigned to them, get paid, and part ways. They will only be a factor in your budget when you need their services again.
2. Better Cash Flow Management
In line with cost efficiency, one of the reasons for outsourcing is to have better control over the business cash flow. When you hire freelancers, your fixed costs (salary for a full-time employee) can be converted into a variable cost (payment for on-demand services). More than that, outsourcing eliminates the need to invest in expensive infrastructure or technology. For example, you would no longer need to invest in cameras or editing software if you hire a freelance photographer, since they should already have these on hand.
This move can free up a bit of your cash flow, giving you the finances to invest in more integral parts of your business. You could use the additional cash to finance a marketing campaign, develop new products, or improve your services. In addition, the lower your fixed costs are, the higher your profits will be.
3. More Focus on Business Objectives
Statistics show that 57% of companies decided to outsource so they could place more focus on their business objectives.
The daily operations of your business are filled with paperwork and other routine jobs. These mundane tasks are draining much of your employees’ and company’s productive time. As a result, it prevents them from focusing on the thing that matters the most: achieving your objectives.
In addition, you are putting your employees’ expertise to waste when you delegate these non-core duties to them. When you hire freelancers for these tasks instead, you can streamline your processes and have more time and human resources to strategize how to achieve your goals.
4. Improved Quality of Service
Focusing on achieving your company’s objectives will result in a better quality of service and at the same time, a positive impact on customer satisfaction.
Since your operations are already narrowed down, your company will become a lot more efficient. For one, you will be able to deliver services and manufacture or develop products faster, which is always a good thing for consumers. Also, customers demand a resolution for their problems right away. Delegating customer support to a third-party company or freelancer is one good way to ensure that the needs of your customers will be met in a timely and orderly fashion.
After all, these companies have employees who are adequately trained to come up with solutions customized to the needs of your clients. They can also provide the personalized touch that your customers want to experience. This might be one of the reasons why customer support is the most commonly outsourced area in the business industry.
5. Access to Unparalleled Talent and Expertise
Do you want to hire an industry expert, but you can’t find one in your local area? Do you want to take advantage of the expertise and talents of a professional without spending money on training? Do you not have enough budget to pay a full-time specialist? These are the reasons why 28% of companies resort to outsourcing.
One of the reasons for outsourcing is that it expands the talent pool that your business can take advantage of. You are no longer limited to the skills and expertise of the people in your company and the local region. With outsourcing, you can retain the services of professionals with vast experience and understanding about the job at hand.
You see, a successful freelancer who has been in the industry for a long time has already worked with hundreds of companies or individuals from different sectors. As a result, they already able to bring with them in-depth knowledge and practical experience that some of your long-time employees don’t possess. In short, they can provide unique insights or out-of-the-box ideas to your company. Capitalizing on their experience can help your business grow and innovate.
Find Top Freelance Talent For Outsourcing Work
Now that you are aware of these reasons for outsourcing, you may be inspired to make the shift that most businesses are already making. However, it is crucial that you accurately identify which parts of your business you need to outsource.
To determine that, you have to look for the areas of your business that you are struggling with regularly. Second, identify the ones that require a specialized tool or expertise. Last but not least, determine which areas of your business you do not have in-depth knowledge of. These are the areas that you need to outsource so you can focus on scaling your business.
After that, it’s just a matter of finding the right talent for the job. And Legiit is a great place to start your search. Every single day, business owners are matched with the qualified freelancers they need on Legiit. With a secure payment platform, a dedicated support team, and a wide variety of service categories, Legiit is the only freelance marketplace you need.