Why Outsourcing Can Be a Game-Changer for Your Growing Company

The skills gap is growing. It's time to get comfortable with the idea of outsourcing more tasks.

By Jeff Barrett, Inc.

With the skills gap continuing to receive attention and U.S. unemployment rates at some of the lowest levels since the turn of the millennium, businesses that want to tap into talent will need to learn to outsource.

A whole host of innovations that have emerged over the past two decades have enabled talented people to do their best work from anywhere in the world that offers an internet connection. The remote work trend has, in turn, given rise to a veritable army of freelancers. According to Upwork, 56.7 million Americans freelanced in 2018.

Initially, companies started outsourcing as a way to cut costs. After all, contractors only do the work you need, they don't require an annual salary or benefits, and they even pay their own employment tax. While those perks still apply, companies are increasingly turning to outsourcing for a different reason.

In today's sparse labor market, companies are hiring freelancers to increase the expertise available to their team in the hopes of gaining an advantage over their competition and advancing in their industry. Deloitte's 2018 Global Outsourcing Survey points out that disruptive outsourcing -- designed to drive growth and make an organization more agile -- has now outpaced traditional outsourcing, which merely aimed to reduce costs and enhance back-office operations.

If you think your company could benefit from freelancers, these three steps will help you pinpoint your needs and make the most of outsourcing.

1. Think about your skills gap first

Look at your business functions, and if you see an in-house skills deficit, outsource the task to a freelance expert. You'll be in good company -- according to a recent study by The Learning House, Inc., and Future Workplace, nearly half of companies plan to outsource tasks to vendors to help fill a skills gap.

Samsung took this approach, working with freelancers from across the globe after discovering that it was difficult to hire full-time developers with the exact skillsets the tech giant needed--particularly on short deadlines. The company partnered with Upwork to fill the capability gaps and create a platform for on-demand talent, according to Fortune. The result: Samsung's new platform cut administrative time by 64 percent and costs by 60 percent.

2. Don't micromanage, but don't check out, either

Outsourcing a project doesn't mean it's running completely on autopilot. Freelancers and business partners will still require direction, and you'll want to occasionally check in to approve certain decisions. "I've seen clients who end up on the opposite end of micromanagement, dedicating close to no time to a project or abandoning it altogether," writes Andrey Kudievskiy, founder and CEO of software design and development company Distillery, a two-time Inc. 5000 honoree and Gold Stevie Award winner.

Arm's-length management doesn't mean hands-off management. If your outsourced team needs you to approve a design by a certain deadline, do so. Failing to provide necessary feedback can result in delays that could easily have been avoided. And understand that you'll have to invest time upfront to get you and your outsourced team on the same page regarding strategy and goals.

I worked with a company that opted to outsource a department's entire function. The idea was to lighten the team's load, enabling well-trained data analysts to do less data entry and more high-value tasks.

The analysts were well aware of the "garbage in, garbage out" mantra, so they worked alongside the new freelancers for two weeks before setting them free. While it ate up a lot of initial time, the department didn't lose momentum on its most important reports.

3. Measuring your outsourcing efforts

If you're not measuring the performance of your outsourced workers, you're doing yourself a disservice. That said, you need to approach the review process with the right expectations. You have every right to hold freelancers to a high standard, but make sure to factor in certain inevitable disadvantages that your in-house team members don't face.

For example, fielding certain customer service inquiries might take your outsourced employees slightly more time than your in-house team would; they're less familiar with your products and customers. Take the information from tracking performance to provide feedback and resources to help your freelancers improve. In your feedback, be specific and point to examples from the freelancer's work.

With a large pool of talented individuals to choose from, companies can get a much-needed productivity boost without the need to add more expensive, full-time employees. If you think your company could benefit from freelancers, try outsourcing a few tasks. You have little to lose -- and everything to gain.


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Finance Magazine: Why Outsourcing Can Be a Game-Changer for Your Growing Company
Why Outsourcing Can Be a Game-Changer for Your Growing Company
The skills gap is growing. It's time to get comfortable with the idea of outsourcing more tasks.
Finance Magazine
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