Almost one-third of businesses are expected to rely on more outsourced services in the next two years.
If done strategically, outsourcing provides access to specific expertise at a cheaper cost than hiring in-house.
And it can free you up to focus on the core parts of your business to increase revenue and profitability.
But blanket outsourcing, or outsourcing with no goal or strategy in mind, can be a hindrance rather than a help.
In this article, Andy MacGregor, managing director at outsourced virtual receptionist provider Face For Business, outlines the parts of a business that shouldn’t be outsourced.
Your core competencies
Core competencies are essentially the services or products you provide.
For example, if you’re an accountancy firm, you wouldn’t outsource the accounting consultancy part of the business.
The goal of outsourcing is to give you more time to focus on your core competencies, not to do the job for you.
Remember, these are services you’re the expert on and what you’ll be building your reputation on, so you wouldn’t want to trust someone else to provide the service for you.
Serious HR problems
HR and recruitment are some of the most common functions that businesses outsource.
But when it comes to more severe HR problems, like conflict resolution within the business or serious disciplinary issues, this is something you’ll want to retain in-house.
For one, you don’t want to be seen as ‘passing off’ serious problems to someone else and ignoring them inside the business.
Plus, how these problems are handled can have long-lasting implications, so you’ll want to deal with them yourself to ensure they’re resolved effectively.
Management and key senior personnel
Management consultancies are big business, and it’s common to bring them in when directors need help with the strategic positioning or direction of the company (for instance, when you’re looking to cut costs or increase revenue).
But your business is built around a core team of managers and key senior people who’ll be responsible for the overall running of the company – this is something you’ll want to retain control of in-house.
These senior people set the tone for the business.
Everything from culture to profitability runs through them – so you don’t want to hand this over to an outsourced provider who doesn’t fully understand your business.
When it costs more to outsource than hire in-house
One of the most common reasons for outsourcing is getting access to expertise at a lower cost than it would take to hire in-house.
Marketing is a prime example.
You could spend £3,000 a month in salary for one manager or spend the same on a consultancy and get access to many more skills, from strategy to research to copywriting, SEO, PPC and much more.
In this scenario, outsourcing to an agency could make more sense.
A virtual receptionist is the same.
You could hire one receptionist for £30,000 a year, plus all the additional tax, insurance and admin that comes with hiring a full or part-time employee.
Or you could hire a virtual receptionist service and get a whole team of call handlers who provide a more reliable service at a fraction of the cost.
However, sometimes, it might be the case that outsourcing could be more expensive than hiring someone in-house.
So you should always research these costs before committing.
Strategic outsourcing is the answer to filling skills gaps
While outsourcing has many benefits, it can just quickly become an expensive exercise if you fail to research the roles and providers you want to bring in from outside.
Before committing to outsourcing, make sure you’re clear on the goals and objectives you want to achieve.
This will be hugely beneficial when you’re trying to judge whether you’re getting a good ROI from your outsourced investment.