There was a time—not that long ago—when all work-related tasks and services for a business of any size were done in-house. Then, something remarkable happened. Businesses worldwide realized that if they outsourced work, they could save money and achieve more.
So, how much has small business outsourcing increased over the past few years? The increasing number of freelance workers in the U.S. is a good indicator. The Freelancers Union reports that 34 percent of Americans are now freelancing. That’s one third of the American workforce, which equals 53 million workers!
In addition, Forbes reports that Bain & Co. conducted a study of 2,000 companies over a period of 10 years and found that only 10 percent of those companies experienced growth that was sustained and profitable. One of the primary things that set these companies apart was their use of capability sourcing. With this in mind, let’s take a look at how outsourcing can help your small business.
What can be outsourced?
There are so many different aspects of business operations that can be outsourced—it’s not only menial or administrative tasks. There are important aspects of running a business that are critical for success, but that a small business owner would rather outsource to an expert in the field, either because the owner doesn’t have the time or the expertise to do it themselves.
Small business outsourcing includes work such as:
- Writing (articles, press releases, web content, ebooks, and so on)
- Web design
- Payroll management
- Graphic design
- Administrative assistance
- Software engineering
- Web and mobile development
The above list comprises the more standard outsourcing requests. There are also some pretty unique and even strange tasks that have been outsourced by various companies. For example, digital services marketplace Fiverr enables you to get creative by enlisting the help of a freelancer offering a weird and wonderful service such as:
- Recording a voicemail message as your favorite celebrity
- Designing a company logo in graffiti style
- Creating a custom font using your handwriting
There are some really unique needs out there, and chances are there is a freelancer or company who can meet those needs. But when it comes to outsourcing, what are the benefits for small businesses? Let’s take a look.
Benefits of outsourcing
Perhaps the first thing many people think about when they hear the word outsourcing is that it saves money. This is definitely true. CNN reports on Buffalo Jackson, a small clothing startup in the U.S., for which owner Xan Hood saves $270,000 per year by not having full-time staff members on his payroll. Instead, he outsources the work and only pays $30,000 a year.
A small business that outsources is able to save money by avoiding the following:
- Paying a full-time salary or wage
- Paying the U.S. federal payroll tax (or equivalent in another country)
- Providing paid vacation or vacation pay
- Paying for training and continuing education or professional development
- Paying for office space and equipment (Harvard Business Review reports savings of $1,900 per employee over a period of nine months; PGI reports annual savings on real estate of $10,000 per employee)
Saving money is undoubtedly a motivator to outsource certain aspects of your business. However, there are more benefits than simply saving money, and they might just surprise you.
Additional benefits of outsourcing enjoyed by small businesses:
Leaves time to focus on the most important parts of your business
When you can outsource the menial, office-based tasks, the tasks that you don’t enjoy, or the ones at which you are not skilled, it leaves you time to focus on aspects of the business that are more important.
Levels the playing field
Small businesses have traditionally had a difficult time competing against the larger companies with more capital. Now that small businesses can hire incredible talent on contract and at reasonable prices, they can compete more easily with the larger companies in their industry.
Allows you to tap into a larger talent pool
When you use online platforms to outsource, you can tap into the global talent pool. Small businesses no longer have to find experienced workers or companies in their local geographic area. There might be a talented writer in Canada, a highly experienced programmer in Russia, and a great graphic design company in India that would all make great additions to your team.
The greater and more varied talent you can attract to your team, the higher the chance of increasing innovation in your business. Developing new products and services faster and coming up with new ways of doing things is easier to do when you have a diverse team of experienced and dedicated people working for you.
Global Workplace Analytics reports that people who work remotely are more efficient and have a higher level of productivity than their onsite counterparts. Larger businesses, such as Best Buy and British Telecom, report remote employees are 35 to 40 percent more efficient. In fact, over two thirds of businesses report that employees that work remotely are more productive.
No need to train employees
Businesses that outsource will hire well-established companies or people who are already trained and have established themselves as experts in their field. They are hired to do a specific job and you are not required to provide or pay for specialized training.
When outsourcing work, it is easy to scale up or down depending on the needs of the company. If work is slow at certain times of the year, it is easy to cut back. If business picks up rapidly, it is easy to increase your workforce as you need it.
As you can see, there are clear benefits to outsourcing particular tasks. If you’re still on the fence about what kind of employee to hire, check out our article on Bplans on how to determine what kind of employee you need to hire.
Now, let’s take a look at how to find this talent.
Outsourcing service providers
Outsourcing tasks and projects for your business requires you to find a talented and experienced freelancer or business that is able to provide the service you need. Fortunately, this is easier than you might think. There is an entire industry growing up around the need for finding talent on a global scale.
Outsourcing smaller or one-time projects:
If you are looking for a freelancer to complete a one-off or specialized task, there are a host of online freelancing platforms to choose from. Here are just a few of your options.
Upwork is an all-encompassing freelancing platform, previously known as oDesk. Upwork offers a huge pool of talent in many different fields, including:
- Writing and editing
- Web design
- Virtual assistance
- Customer service
- Graphic design
Clients post a project and service providers submit bids and proposals for the work. The price paid by the client will depend on the experience and ratings of the service provider, but any business can find a service provider that suits their budget. Clients can set up project milestones and have complete control over the project.
For more on finding freelancers on Upwork, check out our article on Bplans: How to Find Great Freelancers on Upwork (Formerly oDesk).
PeoplePerHour is a platform that allows clients to choose providers in one of three ways:
- Using PeoplePerHour’s trademarked Browse Hourlies, where clients can find a fixed price offer from a provider who is ready to begin right away
- Posting a job and allowing providers to bid
- Browsing provider profiles and choosing one to contact
Clients can hire providers for a number of services, such as:
- Web content
- Website design
- Graphic design
- Video development
- Mobile app creation
TopTal is an outsourcing platform that is designed specifically for web development. However, this isn’t the only difference between TopTal and other platforms. TopTal also puts providers through a rigorous screening process that ensures they are the very best in their field.
TopTal is one of the more expensive outsourcing platforms but it offers the very best quality for:
- Front-end engineers
- Back-end engineers
- Quality assurance engineers
Outsourcing larger or ongoing projects:
Online freelancing marketplaces can be the answer to your project needs, but what if you are serious about outsourcing a more significant portion of your business processes? Each year, the IAOP announces The Global Outsourcing 100, a list of the 100 best outsourcing service providers.
Here are just a few providers and the services they offer:
Accenture is one of the leading outsourcing service providers in the world, servicing the following industries:
- Media and technology
- Financial services
- Health and public service
- Products and resources
Accenture’s goal is to provide technology solutions at the point where technology meets business. These solutions will enable their clients to improve their efficiency and productivity and are delivered via Accenture’s five businesses, including:
Cognizant offers a wide range of services in the following industries:
- Banking and financial services
- Consumer goods
- Energy and utilities
- Information services
- Life sciences
- Media and entertainment
- Transportation and logistics
- Travel and hospitality
Cognizant operates on the premise that to be digital means to be more human. With that in mind, Cognizant strives to help businesses apply digital technology to the way they work and the way they serve their customers and clients.
Cognizant’s services are wide-ranging, encompassing IT, business process services, and consulting. With a delivery network that is global in scale, Cognizant helps businesses adapt to the changing realm of business and become more scalable and increasingly flexible.
ITC Infotech serves the following industries:
- Consumer packaged goods
- Banking, financial, and insurance
ITC Infotech is a big data specialist, providing a full spread of global technology services such as data warehousing, infrastructure setup, and data transformation and governance. With a 5D framework of excellence—domain, data, digital, design, differentiated—ITC Infotech provides flexible solutions for supply chain-based industries.
Trigent Software provides product engineering, technology solutions, and a variety of services for the following industries:
- Legal and law
Trigent provides a wide range of services ranging from end-to-end product engineering and SaaS product development, to Microsoft SharePoint consulting, implementation and support, and services such as custom app development, system integration, and quality assurance testing.
Sykes Enterprises is a leader in providing outsourcing solutions for customer contact management. Sykes offers a wide range of services in the following industries:
- Financial services
- Communications and media
- Retail and travel
Sykes offers scalable and flexible services with inbound call support, customer contact management, cloud-based security, SaaS-based talent management, and consulting services. Sykes also provides full-service social media support for customer service across all social media platforms because they understand how important it is to engage with customers via their preferred communication channels.
This is just a sampling of some of the top outsourcing platforms and companies available to small businesses. There really are so many options, there is bound to be something to suit every small business need and every small business budget.
Best of all, small business owners can outsource various business tasks, improving efficiency, and potentially boosting profits.