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How Can Outsourcing Reduce Your Business Costs?

BUSINESS TIPS  |  February 22, 2023

The beginnings of outsourcing can be traced back to as early as the Neolithic Era, when several nomadic, hunter-gatherer societies transitioned to farming and stayed permanently in one place.

To maximize daylight and limited resources while improving productivity, our early ancestors learned to develop specialized activities that were distributed across different groups. One group focused on planting and harvesting, while another focused on transporting and distributing to the larger group.

This early iteration of division of labor helped mitigate unnecessary resource expenditure. Fast forward to the 21st century, that basic concept still applies, albeit in a more advanced form: business process outsourcing.

No matter what industry you’re in, below are some of the ways that outsourcing helps your business optimize and lower costs.

  1. Access a Larger Talent Pool

While recruiting directly can be significantly more beneficial in some scenarios, it may not be the most cost-effective way for businesses to access a wider talent pool. This is especially true for startups and even small to medium-sized enterprises that don’t have the resources to actively seek out new hires, or maintain a larger pool of talents. 

  1. Focus on the Core Product or Service

Outsourcing frees up time that would otherwise be diverted from core business activities. This is particularly relevant for businesses that are still experiencing growing pains in providing a product or service. Outsourcing work can help you worry less about accounting, interviewing and hiring, or even a revenue-generating aspect of the business. 

With a more focused team, you can make more clients happy, which translates to steady revenue and ultimately a better bottom line.

  1. You’re Not Required to Pay for Benefits

Businesses are not obligated to enter into an employer-employee relationship with an outsourcing partner. In effect, this helps you save on medical benefits or paid vacation days and dedicate resources to more pressing matters. 

That said, outsourcing by itself doesn’t prevent businesses from providing corporate benefits, should they choose to. Offering perks can be a wise investment in keeping your outsourced workforce happy and ensuring stellar work is rewarded accordingly. It would be a good way of building a stable relationship with outsourcing providers —  a net positive in the long-term.

  1. You Pay for Exactly What You Need at Any Point 

Outsourcing can be an excellent solution to specific needs or projects, especially ones that arise unexpectedly. You can scour the larger labor market for the right expert to work on a specific job within a limited timeframe.

For instance, businesses that are just starting out may need to create a website from scratch within a short time. Rather than hiring an in-house developer and paying a premium on salary and benefits, the option of tapping an agency or freelancer for a project-based engagement may make better business sense.

  1. Outsourcing is Predisposed to Producing Results 

Since outsourcing is usually razor focused in terms of job scope, there’s more emphasis on producing clear results or outcomes. Additionally, from the perspective of the outsourcing partner, there’s a strong incentive to do well, lest you decide to go with an alternative provider who can offer better ROI. 

The outsourcing landscape is quite competitive and there’s plenty of service providers to choose from. It’s crucial to see clearly and identify partners that truly deliver results. That’s where our team at Dojo shines, whether it’s web design, software development, or digital project management.

Reach out to us at [email protected] to learn more about how we can work together.