There comes a time in the evolution of many organizations when someone finally broaches a delicate subject. For some, it is because business is booming and the team is struggling to keep up with demand. For others, it is when there is pressure on the bottom line and cost savings need to be found. Then there are those firms that are simply curious to know if there is a better way of doing things.
The question – should we consider outsourcing?
While some executives dismiss such talk out of hand and persist with doing what they have always done, countless others take a more measured approach and find out as much as they can about a resourcing strategy that has been described as “a very powerful tool to leverage talent, improve productivity and reduce work cycles.” Or, as former Singapore prime minister Lee Kuan Yew once warned: “If you deprive yourself of outsourcing and your competitors do not, you’re putting yourself out of business.”
This guide is for those business leaders keen to explore how different life could be if they looked outside their own four walls. They are the people who want to know the benefits of outsourcing and how to identify if they should even be considering it. They are interested in the staff augmentation versus offshoring debate and what to include in an employee outsourcing agreement.
This is the place they will find all that information and, depending on what they learn, there is every chance they will soon join the almost 80% of global businesses that have reported feeling positive about their relationship with their outsourcing partners.
In its simplest form, outsourcing is the practice of assigning tasks that would normally be completed in-house by one’s own employees to a third-party vendor outside of an organization. Be it a specific project, multiple activities or an entire business function, handing such tasks to a quality outsourcing provider is an excellent way to reduce labor costs while maintaining a significant amount of control over staffing and processes.
From humble beginnings in the 1980s, outsourcing has become an increasingly popular resource for businesses looking to thrive in the modern world. For proof look no further than Grand View Research’s finding that the global business process outsourcing market is set to more than double this decade, rising from $246 billion in 2021 to an incredible $525 billion by 2030. That kind of growth does not happen by chance and is due to the wide array of benefits on offer.
Amid the uncertainty of a global pandemic, labor shortages, supply chain issues and rising inflation, it is no surprise businesses are looking for cost-effective and flexible ways to manage staff resourcing. The good news is outsourcing ticks those boxes and so many more.
Joining the outsourcing revolution is a big decision, be it choosing to assign a few tasks to an external provider or outsourcing entire teams or functions. Here are a few key clues that will help you know if now is the right time.
Recent years have seen the rise of a new resourcing trend. As opposed to assigning tasks to an external provider, staff augmentation sees companies fill skill gaps by hiring professionals to be based in-house on a short-term basis. While boasting many of the advantages of outsourcing such as scalability and minimizing payroll and HR formalities, there are various factors to be mindful of before rushing to sign up.
Ultimately, it is important to remember the benefits of staff augmentation tend to diminish in relation to a project’s length, along with the fact outsourcing providers consider themselves partners rather than temporary service providers.
Outsourcing agreements are the legal documents that outline the formal relationship between businesses and the offshore providers they have partnered with. Compared to some commercial contracts, they can be long and complex but there are a few non-negotiables every employee outsourcing agreement should feature, including:
It should now be clear there are many factors to consider when setting out along an outsourcing journey. It also goes without saying that it is a journey well worth making. Most executives would rush at the chance to reduce costs OR increase efficiencies OR boost productivity so little wonder that so many are thrilled to discover there is a resourcing strategy that provides them with the opportunity to do all three … and so much more.
There are many traditional models of outsourcing but innovative providers are going the extra mile to create unique solutions for their clients. Discover how outsourcing allows businesses to have full visibility and control of their offshore teams without having to worry about facilities, operations and regulations.
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