Running Your Business

Outsourcing For Small Businesses: What Works And What Doesn’t

  • Outsourcing can lower costs, save time and open up a much greater talent pool
  • Payroll, social media, IT, administrative work and benefits management are good jobs to outsource
  • Employee development, security and anything that deals with trade secrets should not be outsourced

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Posted by September 20, 2017

If you need help running your business, you might want to outsource. Outsourcing is when you hire an outside contractor or firm to handle work that an employee would have handled otherwise. Small businesses can also effectively outsource work; it’s not just for huge corporations. Here are some of the benefits, as well as tips for deciding what tasks you should and shouldn’t outsource.

Benefits of Outsourcing

The main benefit: lowering costs. If you outsource, you don’t need to hire full-time employees and pay them a fixed salary with benefits. Instead, you just pay for the work being delivered. When you outsource IT, you can lower costs by 30 percent, according to The Telegraph. Outsourcing benefits management can lower administration costs by 20 percent, according to Professional Staff Management.

You can also expand your talent pool beyond your local area. With the internet, it’s much easier to find contractors and firms that work remotely. You can hire a marketing specialist from New York, an IT firm from India and a virtual assistant from Florida. You aren’t limited to those people who can physically come to your workplace.

Finally, when you outsource, you free up time to focus on the most profitable work, like looking for new clients or product development. If you don’t outsource, you’ll have to spend more time on other, less lucrative, tasks.

Common Tasks to Outsource

Accounting/Payroll

Tax law is complicated and always changing. If you try keeping up with payroll and bookkeeping, it’s far too easy to make a mistake. Outsourcing this work to a professional bookkeeping and payroll firm makes life easier and reduces the chance of costly errors.

Administrative Work

If you and your employees are answering the phones, setting appointments and managing emails, it takes up a lot of your day. You could hire a virtual assistant, for a fraction of the cost of a live employee, to handle this busy work.

IT Work

Some IT work makes a lot of sense to outsource, like designing and managing your website. You are better off working with a web expert than having an employee try to figure it out. Cloud storage management is another good task to outsource since it can be expensive and complicated to set up your servers.

Social Media and Content Marketing

These are great platforms to promote your business, but they are time-consuming. You could outsource to specialists in these fields to create better marketing campaigns for less money.

Benefits

A Professional Employment Organization (PEO) combines the HR work for hundreds of small businesses. Not only would they manage benefits on your behalf, they can help you qualify for lower rates through their greater purchasing power.

Jobs You Shouldn’t Outsource

Employee Development

Training and developing employees is something your management should handle. Otherwise, employees won’t feel connected to your organization.

Security

You should manage your own security, both physical and cybersecurity. A third-party won’t have the same motivation to keep everything safe.

Confidential Work

If you are dealing with any trade secrets, it’s better to work with employees rather than outsourcing. Employees are more loyal and less likely to leak, especially if you have them sign a non-disclosure agreement.

Remember, you don’t need to outsource every job all at once. Try a few simple tasks first and see how it goes. If it’s a positive experience, you can outsource more and more tasks. By taking these steps, your business will be able to deliver more with less.

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