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10 Reasons to Outsource Your Business

10 Reasons to Outsource Your Business

Outsourcing by sending some of your company’s work to a third party is an increasingly common way of doing business in the 21st century. It was first developed in the late 1980s as a way companies could gain a competitive edge in the newly global market, and is now used widely across a number of fields. Here are just some of the reasons you should consider outsourcing for your business.

1. Labor costs

One of the main reasons businesses began outsourcing is because it is an effective way to decrease labor costs. This is because, rather than employing a number of full-time staff who are on the payroll even when their services may not be required, outsourcing provides you with a flexible workforce who can work only when needed. What’s more, the cost of labor in some countries is significantly lower than it is in the U.S., which means that even if you are a small company or only outsourcing a small portion of your work, you could still see an extreme reduction in labor costs.

2. Infrastructure and material costs

In additional to decreasing labor costs, outsourcing also allows businesses to cut down on other expenses, such as materials and shipping costs. The cost of materials you use may be decreased by moving some functions overseas, where those materials may be obtainable for significantly cheaper. You may also save on shipping costs if the materials you need for the outsourced functions are available in their new location. You will also save on infrastructure costs, as these will become your outsourcing partner’s responsibility.

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3. Efficiency

Outsourcing also leads to increased efficiency, because you are entrusting non-central company functions to experts elsewhere. Since these vendors are specialists in their area, they are intimately familiar with its ins and outs in a way that members your employees couldn’t be without extensive investment and training. This way, the functions you’ve outsourced can be completed both effectively and efficiently by highly-trained experts in the field who are able to implement their skills and knowledge immediately.

For example, by outsourcing your accounting department, you are taking the burden of mastering complicated accounting duties away from your own offices. This allows you to focus more on your core business functions. Meanwhile, your accounting work will be completed quickly and smoothly by your outside experts of choice.

4. Core business functions

When you keep all of your businesses functions housed together, things get busy and complicated, and your core functions can get overwhelmed by outside issues. These back-end operations end up requiring significant funds and attention, which detracting from what should be your more central concerns. If you outsource those back-end pieces of your company though, it allows you to focus all of your attention and resources on more essential parts of the business. Comfortable in the knowledge that experts elsewhere are dealing with the other functions required to keep your business running, you can put more of your energy toward research, development, and other ways of improving your business’s products and services.

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5. Customer satisfaction

The increased efficiency and ability to focus on your core business functions that come with outsourcing will also have a large, positive impact on the satisfaction of your customers. You’ll be able to produce your products and services faster, which is always a hit. You don’t need to have a separate department at your place, most of the work, even accounting, can be outsourced, thanks to the internet. Plus, with non-core tasks in the hands of experts elsewhere, you’ll be able to focus more on your central functions, thereby improving the quality of products and services you offer. What’s more, by breaking your company down into specialized units, you increase your ability to respond quickly to changes or issues, so any customer complaints or problems can be handled more smoothly.

6. Risk management and continuity

Risk management is central to any business, especially during times of change, such as mergers, downsizing, or management changes. Outsourcing certain departments can help in these transitional times because it lets those areas of your company’s work remain unchanged. Plus, your outsourcing partner will absorb any of the risks associated with the departments it now oversees. This can also help your company maintain an appearance of continuity, as products or services coming from the outsourcing partner will stay the same, too.

7. Globalization

Sending part of your business overseas also enables you to plant your company more firmly within today’s increasingly global markets. These days, many American companies site their international sales as making up a third or more of their total sales. Depending on where your outsourced functions are located, you may also gain a time zone advantage from this new arrangement by having offices that are in sync with different world business schedules, allowing you to operate close to 24 hours a day!

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8. Flexibility

Adapting to changes in the market requires the flexibility to make changes to your company’s size and costs in response to a changing market. You need to be able to react in time to cut the necessary costs during downturns or to ramp back up when the market bounces back.  This is very difficult for companies with large, centralized infrastructures. Outsourcing can help solve this problem because it lets you have short term and flexible contracts with your outsourcing partners. Then your company can cut down or ramp up on staff, production, etc. right away in response to changes in the market.

9. Resources

Having some of your businesses functions outsourced also gives your company accessed to new resources and frees up resources that would otherwise be devoted to those back-end functions. With the outsourced aspects of your business now being taken care of by experts in the field, you’ll no longer have to use resources on recruitment, training, or salaries for those competencies. Plus, by creating a connection in a new, possibly overseas location, you may open your business up to more cost-effective resource streams.

10. Innovation

By outsourcing non-core functions of your company, you allow your business to focus its attention and energy on more central aspects of your work. Part of what your newfound time and energy can go into is developing new ideas. After all, the shift to an outsourcing model automatically opens your company up to some changes in structure, which is a great way to spur more foundational types of innovation.

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Meanwhile, the functions now being carried out by a third party outsourcer could also be home to innovation, because the staff in question will be highly trained specialists in the area at hand, they may also be able to innovate in ways that benefit your company.

Final thoughts

If you’ve looked at these numerous advantages to outsourcing and realized what a good option it might be for your business, it’s now time for you to make a plan of action. Decide which departments would be best outsourced to a third party and start looking around for experts who fit the bill. It may seem daunting at first, but it will do wonders for your bottom line.

Featured photo credit: pexels.com via pexels.com

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Last Updated on March 29, 2021

5 Types of Horrible Bosses and How to Beat Them All

5 Types of Horrible Bosses and How to Beat Them All

When I left university I took a job immediately, I had been lucky as I had spent a year earning almost nothing as an intern so I was offered a role. On my first day I found that I had not been allocated a desk, there was no one to greet me so I was left for some hours ignored. I happened to snipe about this to another employee at the coffee machine two things happened. The first was that the person I had complained to was my new manager’s wife, and the second was, in his own words, ‘that he would come down on me like a ton of bricks if I crossed him…’

What a great start to a job! I had moved to a new city, and had been at work for less than a morning when I had my first run in with the first style of bad manager. I didn’t stay long enough to find out what Mr Agressive would do next. Bad managers are a major issue. Research from Approved Index shows that more than four in ten employees (42%) state that they have previously quit a job because of a bad manager.

The Dream Type Of Manager

My best manager was a total opposite. A man who had been the head of the UK tax system and was working his retirement running a company I was a very junior and green employee for. I made a stupid mistake, one which cost a lot of time and money and I felt I was going to be sacked without doubt.

I was nervous, beating myself up about what I had done, what would happen. At the end of the day I was called to his office, he had made me wait and I had spent that day talking to other employees, trying to understand where I had gone wrong. It had been a simple mistyped line of code which sent a massive print job out totally wrong. I learn how I should have done it and I fretted.

My boss asked me to step into his office, he asked me to sit down. “Do you know what you did?” I babbled, yes, I had been stupid, I had not double-checked or asked for advice when I was doing something I had not really understood. It was totally my fault. He paused. “Will you do that again?” Of course I told him I would not, I would always double check, ask for help and not try to be so clever when I was not!

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“Okay…”

That was it. I paused and asked, should I clear my desk. He smiled. “You have learnt a valuable lesson, I can be sure that you will never make a mistake like that again. Why would I want to get rid of an employee who knows that?”

I stayed with that company for many years, the way I was treated was a real object lesson in good management. Sadly, far too many poor managers exist out there.

The Complete Catalogue of Bad Managers

The Bully

My first boss fitted into the classic bully class. This is so often the ‘old school’ management by power style. I encountered this style again in the retail sector where one manager felt the only way to get the best from staff was to bawl and yell.

However, like so many bullies you will often find that this can be someone who either knows no better or is under stress and they are themselves running scared of the situation they have found themselves in.

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The Invisible Boss

This can either present itself as management from afar (usually the golf course or ‘important meetings) or just a boss who is too busy being important to deal with their staff.

It can feel refreshing as you will often have almost total freedom with your manager taking little or no interest in your activities, however you will soon find that you also lack the support that a good manager will provide. Without direction you may feel you are doing well just to find that you are not delivering against expectations you were not told about and suddenly it is all your fault.

The Micro Manager

The frustration of having a manager who feels the need to be involved in everything you do. The polar opposite to the Invisible Boss you will feel that there is no trust in your work as they will want to meddle in everything you do.

Dealing with the micro-manager can be difficult. Often their management style comes from their own insecurity. You can try confronting them, tell them that you can do your job however in many cases this will not succeed and can in fact make things worse.

The Over Promoted Boss

The Over promoted boss categorises someone who has no idea. They have found themselves in a management position through service, family or some corporate mystery. They are people who are not only highly unqualified to be managers they will generally be unable to do even your job.

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You can find yourself persistently frustrated by the situation you are in, however it can seem impossible to get out without handing over your resignation.

The Credit Stealer

The credit stealer is the boss who will never publically acknowledge the work you do. You will put in the extra hours working on a project and you know that, in the ‘big meeting’ it will be your credit stealing boss who will take all of the credit!

Again it is demoralising, you see all of the credit for your labour being stolen and this can often lead to good employees looking for new careers.

3 Essential Ways to Work (Cope) with Bad Managers

Whatever type of bad boss you have there are certain things that you can do to ensure that you get the recognition and protection you require to not only remain sane but to also build your career.

1. Keep evidence

Whether it is incidents with the bully or examples of projects you have completed with the credit stealer you will always be well served to keep notes and supporting evidence for projects you are working on.

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Buy your own notebook and ensure that you are always making notes, it becomes a habit and a very useful one as you have a constant reminder as well as somewhere to explore ideas.

Importantly, if you do have to go to HR or stand-up for yourself you will have clear records! Also, don’t always trust that corporate servers or emails will always be available or not tampered with. Keep your own content.

2. Hold regular meetings

Ensure that you make time for regular meetings with your boss. This is especially useful for the over-promoted or the invisible boss to allow you to ‘manage upwards’. Take charge where you can to set your objectives and use these meetings to set clear objectives and document the status of your work.

3. Stand your ground, but be ready to jump…

Remember that you don’t have to put up with poor management. If you have issues you should face them with your boss, maybe they do not know that they are coming across in a bad way.

However, be ready to recognise if the situation is not going to change. If that is the case, keep your head down and get working on polishing your CV! If it isn’t working, there will be something better out there for you!

Good luck!

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