Outsourcing – Does It Work?

THERE is an awkward moment when you are running a small business, perhaps by yourself or with one or two employees. Do you add new employees to take over tasks you have to manage to free up your skills elsewhere, or do you outsource some parts of your work?

The answer lies somewhere between a balance of the skills available within your current working team and the cost of outsourcing important roles within your business. Do you teach one of your employees to manage your bookkeeping, a task which may consume between two and four hours of the working week, or do you employ an outside business to manage your bookkeeping?

There are many aspects of your business which may be outsourced; customer service calls, telemarketing, and online marketing, virtual assistant services, administration support, your HR requirements, marketing and accountancy. There are many occasions where outsourcing will provide you with professional skills for your business that you or your current employees have no time to conduct or learn to master. On the other hand, you know your business completely; can an outsider complete your sales and marketing with the same vigour and personal endeavour that you deliver?

When you use outsourcing services, this allows your company to focus on your core competency and delegate work where it is required. Although the cost per hour will probably be more than you pay your current employees, it is an inexpensive business cost to provide valuable roles that do not require full-time or true part-time involvement within your business.

You will need to complete a proper cost benefit analysis, including all of the time participation for all the people involved, your time and any training to help the outsourcers or your current people reach the standards required by your business.

One of the main advantages of outsourcing work and skills is the provision of the ability for your business to grow without any of the major investments required in hiring and training new personnel. Outsourcing works because it allows you to provide a service efficiently, without the hassle of managing new employees and stick to a fixed budget which allows you to plan for your future.

Although the initial fees for outsourcing may look high, they can be sourced from different parts of the world, where salaries may be less than your own country. You will have reduced your overhead expenses because you will not provide training, pension and health benefits to individuals that you would have needed to employ, as a substitute for outsourcing skills.

For the management of your business, you will be employing professionals who have a duty to be efficient from the moment they begin working for you, rather than taking away your own time to teach people about the way in which you wish to conduct your business. Nevertheless you must be prepared to invest time and energy, showing the outsourced company how your business expectations are to be met.

Where outsourcing is new for you, it is better to speak with individuals that you trust, perhaps similar sized business owners, to talk about their experiences of outsourcing work. It is not guaranteed that all outsourcing is preferential to keeping some tasks in-house, but it does provide you with the opportunity to expand and your business more rapidly.

Samuel Rosenberg is the founder and CEO of Axcel Finance Ltd., the leading regional microfinance institution. Share your thoughts and email your questions to [email protected]