Now more than ever, outsourcing is the norm. Contracting to third-party freelance workers or BPO companies is among the most cost-effective ways to operate a business. However, regardless of budgetary requirements many prominent companies are converting to this highly efficient practice, simply because it allows businesses to put more of their resources (and funds) elsewhere. Some common roles to outsource include telemarketing, data entry and customer care.
If you’re looking to outsource to third-party contractors, it is always advisable to have a full understanding of your options so that you can be confident in where your money is going – after all, there isn’t just one way to outsource.
What Is Outsourcing/Third-Party Contracting?
Outsourcing involves enlisting professional freelance workers or companies that specialize in the department that requires developing or operating. These workers act as part-time or perhaps full-time “employees” – without the added cost that goes along with it. This is because contractors are able to work for multiple companies, which helps to supplement their income. As well, contract work affords full autonomy, flexibility and the potential for a more profitable future for both the company and the contractor.
Why Contract or “Outsource”?
Contracting is a very useful tool in many scenarios. For example, when a business is in the midst of expansion, things can move very quickly. Sometimes, business owners find that they suddenly require more support staff for various operational duties. However, a full-time staff developed in-house might not be necessary (or the most efficient way to go). This is where contracting comes into play.
Outsourcing, Contracting and Solutions for a Tight Budget
It’s no secret that contracting has the appealing advantage of cost savings – but how, exactly? Simply, contracting is a more cost-effective method of operating a business due to the nature of its hourly layout and business format. You are not necessarily required to promise a set amount of hours to your contractor, and the term may very well be open-ended. This allows you the freedom to only pay for work that needs tending to, and hours that truly count. With a full-time staff, there isn’t always a steady workflow, and businesses often end up paying for unnecessary hours. This is why contracting (or “outsourcing”) is such an attractive concept to the those who do not require round-the-clock personnel. As well, you are not required to provide equipment or an office because it is standard for contractors to have their own.
Another economic advantage comes from the ability to avoid a laundry list of government requirements that accompany housing a full staff of employees. Due to stipulations like sick pay, vacation time, maternity leave, healthcare and insurance benefits etc., it will always be far more expensive to develop and maintain a team in-house.
Outsourcing is always preferable if your main concern is budgetary – but even many large and notable companies have chosen to save money by going this route.
While it’s true that contracting third-party workers can be incredibly advantageous with regard to profit margins and business efficiency, there are some downfalls to contracting freelance personnel as opposed to a dedicated outsourcing company such as Anexa.
Read part two of our blog to find out why…