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CEO Insight: How Do You Know When It’s Time to Outsource?

Posted by Michael S OGrady on May 8, 2018 3:01:42 PM
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Outsourcing has become a trend that doesn’t show any signs of slowing down. With technology advancements come progress and change, and many companies are deciding that one of those changes is a move to outsource more of their business needs, instead of hiring in-house.

But how do you know when it makes the most sense to outsource? When is outsourcing better than hiring a new employee? Here are some situations that may benefit best from outsourcing. 

Busy Seasons

Sometimes a business needs to increase their productivity fast to accommodate a busy season, but they don’t want to commit to hiring someone year-round. Outsourcing can be a great way to fill in the gap, so to speak, without hiring someone full-time. 

Core Business Building Activities

When running a small business, the most profitable ones make sure they are focused on money-making activities.stellapop-click-to-tweet Extraneous tasks, grunt work, and things that don’t necessarily improve a company’s bottom line could be outsourced. For instance, janitorial services are something more businesses are outsourcing or opt for a coworking or office location that has theme amenities included. Payroll is another area that is frequently outsourced, rather than hiring a financial team of experts. 

One-Time Events and Outside Expertise

Sometimes you need an expert to handle critical tasks, but the skills of your employees don’t measure up. Instead of risking costly errors, it may be better to outsource to a firm that specializes in what you need.

Additionally, there are times when you have projects or events pop up that are not normative, such as building a website or creating a logo. In instances like this, it doesn’t make sense to hire someone full-time. Better to outsource to a professional with the expertise necessary to accomplish the goal.

Questions to Ask Before Outsourcing

  • Is this task or activity of core value? 
  • Does is produce profit and success?
  • Is this task routine and generalized? 
  • Could it be easily outsourced?
  • Is this task one that no one on staff enjoys doing? 
  • Would it be more efficient and make for a happier work environment to outsource it?
  • How much will this task cost to outsource?
  • How much will this task cost to hire someone?
  • Even if the task is cheaper to hire, is it draining valuable time and resources best served elsewhere?
  • Is this task something that is only necessary once or twice a year? 
  • Does this task require specialized skills or training that your staff doesn’t possess? 

Benefits to Outsourcing

There are a variety of benefits to outsourcing. Cost is a big motivating factor because it is often cheaper to outsource certain things than it is to hire a full-time or even part-time employee. This makes the business budget happy, and it saves you and your employees valuable time and energy that could be put to better use doing other activities to grow your business. 

Outsourcing is efficient, and there is minimal on-boarding required to do it. Plus, you will often be hiring experts that specialize in a certain area or skill, which means that your business reaps the benefit of their expertise, without the commitment of paying full-time wages, medical insurance costs, hiring bonuses, and paid vacations.

Ultimately, only you can decide what will work best for your business. Sometimes it makes sense to outsource. Other times, it may not. Weigh your options and do what you think will be most beneficial to your growth and success. 

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