Why Do Companies Choose to Outsource Work?

There are many reasons why companies choose to outsource work. Business process outsourcing has become a practice for different companies across various industries. But it isn’t something that is done overnight, nor is it a one-stop solution for every company out there. 

Retail outsourcing is a well-known go-to strategy for businesses to cut costs without sacrificing their existing services. Companies from different industries are looking towards outsourcing to expand without allocating too many resources to new and up-and-coming departments.

Every business venture has its pros and cons. As a leader, it’s your job to weigh this information against each other to find out if outsourcing is the right move for your company.

A Quick Rundown Of Outsourcing And Its Definition

What does an outsourcing company do? By definition, outsourcing is the act of partnering with external service providers to offload your non-core services to their employees or agents. These agencies offer their outsourcing services to companies within different industries, services such as sales and marketing (digital marketing as well), customer support, lead generation, outbound calling, and more.

People often connect the word with offshoring as they usually find outsourcing companies in the Philippines, India, or Mexico. These countries have a large pool of professionals and fresh graduates from different backgrounds, these people are your assets should you consider outsourcing your work.

Not to mention that outsourcing can always be done by professional freelancers or individual contractors too.

Reasons for Outsourcing to a Trusted BPO Company

As mentioned above, outsourcing is a practice that offers a safety net for organizations and companies. But why do companies outsource? There are many advantages that companies can reap when they outsource certain services to a team of experts.

In this section, we’ll tackle some of the reasons to outsource your business’ services to a team of offshore professionals.

Cost-effectivity

Outsourcing is one of the most effective ways to cut down on company costs. Expansion plans can be expensive and may take up resources from deserving departments. 

With outsourcing, you don’t have to worry about overhead costs, extra seats, workspaces, and desks as the external part will be taking care of those.

On a brief note, when signing up with an outsourcing partner, they will be handling these costs for you—from onboarding to displacement.

Lower labor costs

As we mentioned earlier, there are few countries that offer lower labor costs than most places. When outsourcing, you don’t have to let the quality of your services suffer for the sake of the price.

No (or minimal) overhead costs

Overhead costs refer to operational expenses that aren’t tied to any of the products or services your company is offering. These fees usually consisted of rent, utilities, insurance coverage, and more.

When working with an outsourcing firm, you don’t have to shell out more resources for the newly hired employees.

Redundant fail-safe practices

Every business that relies on data should have a fail-safe backup routine in case of emergencies such as a city-wide power outage, natural disasters, and man-made catastrophes. In the IT industry, it’s well known that organizations have an onsite backup server and a cloud-based one—it may sound like it’s too much, but it’s better to be safe than sorry.

Outsourcing firms make sure that every transaction, whether big or small, is well documented and backed up within their respective locations. 

Onsite data servers

Most, if not all, companies have their data stored and backed up to onsite servers that the IT department maintains and works on.

Remote (cloud-based) servers

Cloud-based data servers are sold as a service by third-party providers. This service is referred to as infrastructure by professionals in the industry. It can be maintained by a group of people who can access the infrastructure simultaneously over the internet.

Allows you to focus on core areas

They say that there aren’t enough hours in the day to run a business, but what if we told you that there could be? Outsourcing agencies can help you become more focused on the essential departments that serve as the backbone of your company.

Can I outsource my core services?

As a general rule of thumb, you shouldn’t outsource your core services, as this may mean that you’re relying on an outside workforce instead of your own employees. A couple of departments should be kept in-house, such as professional and employee development as you only know your employees and how they act in the office. 

Unlimited access to excellent services

Outsourcing firms usually have the best talents that range from back-office support to customer and client-facing responsibilities. When partnering with them, you will get access to their labor force that spans different departments.

The global talent pool

Outsourcing and offshoring open your company to a lot of individuals who will be your key to climbing up the ranks of your industry. These prospects may come in the form of freelance employees or independent contractors.

Freelancers and independent contractors are virtual workers who operate within their respective offices, whether at their homes or in a co-working space. Most of them usually are onboarded for a short-term project and have limited insight into the company.

However, the freelancing industry has been seeing an upward trend as the gig economy has overtaken most of the professional sectors.

The Answer to “Why Do Organizations Outsource Services?”

In a few words, the outsourcing industry has become a mega-hit for both local and international companies looking to expand their businesses. Domestic organizations became multinational ones after working with external outsourcing firms.

Each of their respective return on investments (ROI) and revenue skyrocketed up. Executives and leaders were able to put themselves into the business even more, thanks to their outsourcing partners.

Additionally, the outsourcing industry has opened so many avenues and doors for employers and employees alike. For business tycoons, outsourcing means that they have the freedom to be as flexible as they want. For employees and the talent pool, this means that they have endless opportunities and abundant room for growth and learning.

If you’re keen to start harnessing the benefits of outsourcing companies, you can contact us at SixEleven BPO and we’ll help you achieve your business goals in no time.