Why Do Companies Choose to Outsource Work?

Outsourcing can be an excellent opportunity to boost your business, out there already exist a lot of companies that implement this practice. It has existed for a long time, but in today’s world, thanks to the internet, it is more common to outsource different parts of a company, like HR, marketing, or even the finance department. 

Let’s define what outsourcing is: the process of hiring a third-party company to perform certain tasks that are traditionally done in-house, a well-known example is customer support, which is the process of providing assistance and advice to customers to resolve any issues they may have.

There also exist many other services that outsourcing can provide, all of this depends on your needs as a company. 

Outsourcing can be a lifesaver for companies that are starting to grow, and it also can be a cost-saving strategy for companies that are already big. Outsourcing can help you in so many different ways, and here we will explore some of the main reasons why businesses like Microsoft decide to outsource work.

Why Is Outsourcing Important for Big and Small Businesses?

Outsourcing is an important business strategy that can benefit both big and small businesses. By outsourcing certain tasks or processes, businesses can achieve cost savings and increase efficiency, allowing them to focus on their core competencies while letting experts handle other tasks.

Small businesses can especially benefit from outsourcing as it provides access to specialized skills and expertise that may not be available in-house due to limited resources.

Furthermore, outsourcing can offer flexibility to scale up or down quickly in response to changes in demand or business needs, while also helping to reduce the risk associated with certain business functions, such as legal and financial compliance, by letting experts handle those tasks.

Overall, an outsourcing business can be a valuable tool for businesses of all sizes, helping them to improve efficiency, reduce costs, and access specialized skills and expertise.

4 Benefits of Outsourcing 

Helps you have a cost-saving company

Businesses always try to save money and outsourcing can help, this strategy can be more cost-effective than hiring and training new staff to perform some task, it’s less expensive hiring someone that already has the skill needed for a specific task.

This way companies can save money on salaries, benefits, and office space, one of the principal clients of outsourcing can be startups and big tech companies. 

Apple is one of those big tech companies that outsource, it is not a secret that the iPhone you use every day is developed in California but is made in China to save cost. Apple manufactured its iPhones in China, if Apple were forced to manufacture in America your iPhone could cost over 30.000$.

Allows you to increase efficiency in your company

Companies need to focus on those things that matter. By outsourcing work that it’s not that relevant, they can increase the efficiency of its process while they can free time and resources to work on other important projects.

An example can be those big tech companies that need to continuously develop new technology, they need to focus on polishing their products and projects, for being at the top for more time. 

One of the big tech companies that outsource is Google. As you hear, they have outsourced customer service for a long time. According to a 2011 article, they decided to use outsourced customer support agents for their Adwords advertising.

By that year, there were an estimated, a thousand people across 60 countries. By 2018, over half of Google’s workforce was made up of contractors rather than employees. This is an example of how the labor market has changed over the years. 

Outsourcing can be flexible

Outsourcing allows you to understand the needs of your company, there are months of the year that can be busier than others, counting on extra help for a couple of months sounds great and thanks to outsourcing this can be possible.

For example, a company may need to scale up or down quickly to meet changing demands. 

Flexibility also means not having an office to work in, or buying equipment for any new employee. Outsourcing allows businesses to easily adjust their workforce without having to go through the process of hiring and firing staff.

This can be particularly useful for seasonal businesses or those that experience fluctuations in demand.

This characteristic allows you to have employees around the world, Whatsapp for example before being acquired by Facebook, housed just 30 employees, most in charge of customer service, as its technical and development teams were in Russia.

Initial development was outsourced to a Russian independent contractor, Igor Solomennikov, who later became a full-time employee.

Give you access to specialized expertise

Another reason why companies outsource work is to gain access to specialized expertise. Outsourcing allows businesses to tap into a pool of skilled professionals who have experience in specific areas.

For example, a company may outsource its IT support to a third-party provider with expertise in that field. By doing so, the company can benefit from the provider’s knowledge and experience, without having to invest in labor costs by hiring and training its own IT staff.

Alibaba is a really good example because the company understood that they need better programmers to scale its web page easily, which is why Alibaba began seeking partners and outsourcers early in its development across a variety of projects and discovered many of the capabilities it required in the United States. By outsourcing web development to the United States, the site grew faster.

Outsourcing work can provide many benefits to businesses. From cost savings and access to specialized expertise to increased efficiency, flexibility, and risk management, there are several reasons why companies choose to outsource work, don’t stay behind, and consider hiring an outsourcing company. 

Companies around the world already outsource many tasks and processes. If you are considering outsourcing any of your tasks or departments, it is important to carefully evaluate your needs and choose a provider that can meet those needs effectively.

You can be sure that your outsourcing partner is a positive and valuable experience for your business.

Freelance Latam is an outsourcing company that can help you to outsource those areas of your company that need a boost. We already have many successful relations with a lot of companies around the world.

Through the experience we have gained over the years, accompanying multiple companies from different industries to achieve their goals, we have learned that our outsourcing strategy is the most effective and beneficial solution for all types of companies.

It is through connections and win-win dealings that we have created great working relationships with all of our clients. We are proud to have connected more than 150 freelancers with different companies around the world.

We have a lot of talented freelancers ready to help you increase the effectiveness of your business, we have marketing specialists, IT experts, and more professionals that can help your business to grow faster. Contact us, we are always here for you.

Adrián Chacón