April 6, 2021
Telecommuting or remote work quickly became the new norm due to the global pandemic. Businesses and companies had to step up by providing flexible work arrangements to their employees. This arrangement has challenged the traditional office work model as both employers and employees realize that this setup is more cost-effective and has many other positive benefits.
As businesses shift to having a remote work staff, the office culture transformed as employers and employees only interact online. This has opened avenues and globalized the workforce as geography is no longer a hindrance. Consequently, the gig economy skyrocketed in the past year as more workers favor the flexible working conditions and countless opportunities.
There is a dire need to cut business costs in a time when businesses are suffering from huge losses due to the pandemic. Various economic systems are overwrought by demand and labor shortages, sudden economic downturn, and changing consumptions.
Outsourcing is a business practice trend that notably swelled in the last year because it allows businesses to continue to operate and thrive without losing more money. In the same vein, gig workers can afford more opportunities to earn more income.
What is Outsourcing?
The term outsourcing means the process of delegating essential business processes, operational tasks, and service provision to a third party. This external workforce may comprise several individuals or a virtual staffing company to provide specialized outsourcing services for less money.
While the global outsourcing market remains as robust as ever in 2021, this business practice has been around since the early 1990s. In fact, in the past few decades, small businesses have increasingly outsourced their business processes to agencies, freelancers, or special remote work teams.
No matter the size of the business, one thing is for sure. Outsourcing helps save a ton of money. This valuable resource, especially for startups, can be used for something else. So how does outsourcing as a business practice help cut costs?
1. Reduces Employee Overhead Costs – Hiring on-site employees has expensive overhead costs. Apart from basic wages, there are mandatory added costs, including payroll taxes and insurance coverage with worker’s compensation or professional liability coverage if it applies, just to name a few. In addition, there are employment-related costs, including training, recruitment costs, and cost of work equipment, uniforms, or gear, where applicable.
With outsourcing, you work with self-employed virtual assistants who work remotely. They are only paid for the amount of time they work, saving you a ton when paying a monthly salary because you don’t have to pay for additional benefits. Another perk of hiring virtual assistants is there is no need to allocate extra funds for equipment or set up a new space for them to work, which means less monetary burden in utility and general office expenses.
2. Lowers Office Supplies Expenses – Supplies such as paper products, scissors, paper clips, pens, and pencils are some of the most used items in an office. The cost of these essentials can add up pretty quickly since they need to be replenished monthly or as soon as they run out. There are many ways to save on office supplies – you can buy them in bulk, go paperless, or find discounts by simply planning ahead.
Outsourcing is another way to reduce this type of expense drastically. Lowering office supply costs doesn’t mean going without, as some businesses may still employ on-site workers. However, you still save a great deal since all work involving virtual assistants or staff is through telecommuting. Any important documents or contracts will be online and will essentially be more convenient, cost-effective, and eco-friendly.
3. Eliminates Trainings – Partnering with virtual staffing companies means having access to a pool of talent. Outsourcing eliminates the need for extensive training because these workers are already trained and knowledgeable. When you hire a skilled outsourced worker, you will learn that they can quickly get to work after the onboarding process.
Not only does outsourcing eliminate in-house staff training, but it saves you from the cost of initial and ongoing training. It reduces the considerable effort and time invested in recruitment because virtual staffing companies do it all for you.
4. Increases Productivity and Efficiency – Increased productivity and improved business efficiency mean more profit. Outsourcing helps cut business costs by saving money and human resources and helps increase profit margins in the long run.
Finding skilled workers who need little to no training can get you faster results. As experts in their chosen field, they are proficient in turning ideas into actions. These workers are valuable in competitive markets that have quick turnaround rates. The improved efficiency caused by outsourcing allows business owners to focus better on their core business activities.
5. Round the Clock Business – Since outsourcing does away with the limitations of geographical location, businesses can afford to be open 24/7. The idea is to have employees work in shifts to cover all time zones. For example, an American company can subcontract work to a top outsourcing destination like the Philippines with a time difference of twelve hours, more or less.
Having your business be accessible around the clock means more income. Hiring employees located on the other side of the world becomes more realistic and manageable because of the time gap. You can go to sleep without worries because you are leaving operations in capable hands. For example, a virtual customer support team during after-hours will do wonders for your business reputation. Having qualified virtual assistants will increase customer loyalty and retention because they are taken care of by your overseas virtual staff.
Picking the Right Managed Outsourcing Partner Matters
The outsourcing market is competitive, with virtual staffing companies headhunting talented individuals left and right.
Finding the right managed outsourcing partner matters because there’s a lot at stake. Experienced virtual staffing agencies have rigorous hiring processes to ensure that only qualified workers are hired. They eliminate the guesswork of shortlisting candidates, interviews, and assessments to find the right person for your business.
Catherine vanVonno is the President and CEO of 20four7VA, a trusted remote staffing company. She oversees the overall growth and success of the company, leads the short and long-term strategies, and manages the company's finances.