Can Outsourcing Reduce Business Expenses?

by Trevor Michael | Guest Contributor | BUSINESS

Thanks to the internet and the digitization of virtually everything, your options have grown beyond employing a full-time, office-based employee and venture past national borders and outsource your workforce.

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In the past, if you needed to hire talents to help you grow your business, your HR staff, if you have one, would post about it on the local newspaper or any bulletin boards accessible to the public. Or you wait for applicants to come into your office. Either way, your leads are limited within the immediate area of your place of business. And if you're lucky enough to find a suitable applicant for the job at hand, you're likely to hire them on their terms if you need their skills and expertise urgently.

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Thanks to the internet and the digitization of virtually everything, that's no longer the case. Your options have grown beyond employing a full-time and office-based employee from a limited pool of candidates from your city, county, or country. You can venture past national borders and outsource your workforce. 

Offshore outsourcing covers three major categories. These are business process outsourcing (BPO), infrastructure and technology outsourcing, and software outsourcing. Whichever type you need and pursue, the service is bound to reduce your business's operating and overhead expenses.

Here's how outsourcing can reduce business costs.

1. Get HR services
Maintaining an HR department can be costly. By working with outsourcing companies, you have an HR team at your disposal. Sure, you will be paying for their services, but the money you'll spend won't be anywhere close to when you employ full-time HR.

Plus, rest assured that the people working for you are experts in their field. They have gone through relevant training and possess the essential credentials, and even more. They can headhunt the best talents to fill in your vacant job posts.

2. Skip paying full-time employee benefits
Hiring full-time employees means you will be paying full-time employee benefits. Think copays for your staff's health insurance and retirement funds. The government will also require you to pay employee taxes. Plus, any self-respecting employer will provide other benefits and bonuses such as paid vacation and sick leaves.

Those things do not have to concern you if you're outsourcing jobs. You agree to the payment terms with your hired candidate, and that's it. It's up to you if you want to give your outsourced staff some work perks and privileges from time to time. To boost their morale, we advise that you do just that. Something as simple but thoughtful as a gift check won't eat into your profits.

3. No need to spend on employee training
Outsourcing companies are equipped with the expertise and technology to gather a pool of job-ready candidates. Once you pick from the options presented to you, expect that that candidate has the exact skills you are looking for.

Training is one of the major expenses associated with HR management. You get to skip paying for it via outsourcing. If your hired candidate does not deliver what's expected of them, you could replace them with more able candidates.

4. Hassle-free workforce reduction
With outsourcing, the process of finding replacements proves hassle-free. After all, you do not have the usual obligations to your outsourced staff, as do employers to their full-time employees.

In a typical workplace setting, you can't just fire a staff member because there's not much to do anymore. You have to retain your employees even if your business is experiencing inactivity. Outsourcing eliminates that problem. As soon as there's no more work to be done, you can terminate the contract.

5. Cut infrastructure and equipment costs
Putting employees in an office requires investment. You need a work-conducive space, for starters. On top of that, you need to equip your employees with everything they need to get their work done, from computers to printers and what-not.

Meanwhile, outsourced workers are responsible for the equipment they need. They will pay for their internet connection, procure their laptops, and purchase the necessary software. That means you're significantly reducing your operational costs.

6. Round-the-clock services
You can strategically hire outsourced staff from all parts of the globe, so you get to keep your business running 24/7. This feature of outsourcing is most beneficial to e-commerce brands delivering goods worldwide. Your customer service, for instance, won't be affected by time zones. Here you're not just minimizing cost but maximizing profit as well.

Final Message
If you haven't tried outsourcing, it's high time you did. The benefits of this business approach run the gamut. The most obvious, as discussed above, is its potential to reduce expenses incurred in running your business. But that's not all there is to it.

Outsourcing opens you to diverse talents from all over the world. You get fresh perspectives from people hailing from different walks of life. Whether you're in a technical or creative industry, you're bound to reap legitimate rewards from outsourcing.

Just make sure you partner with a reliable outsourcing platform or service provider. Choose one that has a proven track record in the business. Lastly, be at your most critical when hiring a candidate with your outsourcing partner.

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