Saying that running a business is challenging is an understatement. The amount of marketing, accounting, financing, customer service, and shipping can be overwhelming. It’s no wonder why some companies have opted to outsource specific tasks. 

No matter what stage your business is in, as long as you have the budget to do so, you can outsource. Whether you’re a start-up, a large company or an eCommerce business, outsourcing can help you maintain steady growth and productivity. If you think you can’t fulfill certain duties, you can outsource tasks and let other experts handle them. 

Outsourcing can be a viable and highly effective way for small businesses to simultaneously manage daily operations and grow. To understand how it does so, let’s first look at what you can expect should you decide to outsource certain tasks.

How Outsourcing Works

Outsourcing is also known as business process outsourcing (BPO). Companies hire professionals that aren’t affiliated with their organization—freelancers, contractors, or BPO companies. 

These outsourced experts perform certain business functions, typically for a set period. With each task, you can set a different compensation structure, allowing you to complete work for less money. 

Broadly, there are two types of outsourcing. The first is back-office, which includes administration work, accounting, data management, quality assurance, and human resource tasks, to name a few. 

The second type of outsourcing is front-office outsourcing. It deals with customer-facing tasks: marketing, public relations, sales, handling order management systems, and IT help desks.

Pros & Cons of Outsourcing

The number of tasks and functions delegated to an external team can make outsourcing an enticing option for online businesses. There are a few catches, however. Below are the pros and potential cons of outsourcing. 

Pros

  • Allows more focus on core tasks

For small business owners, there are some tasks that, although essential to keeping the company running, may take too much of their time. These are usually the back-office tasks: payroll, hiring, data management or even digital marketing. Outsourcing gives your business more space to focus on critical tasks and projects.

Once you’ve outsourced repetitive and tedious back-office functions, you can give your full attention and time to aspects of the business that is truly needed. 

  • Gets more things done

Any increase in productivity and efficiency can be helpful in the fast-paced world of online businesses. Outsourcing can be a possible option for you instead of increasing the workloads of your existing staff (risking potential burnout and overwork). 

If you’re a small business looking to establish itself online, you can outsource your marketing and public relations efforts to an external team. With a larger workforce, you can accomplish bigger goals faster.  

  • Scales cost-effectively

Outsourcing functions may save you more money than hiring more full-time employees. An option you may take here is staff leasing.

Staff leasing is an outsourcing model where you’re essentially hiring employees through a third-party known as a professional employer organization (PEO). The most significant benefit of hiring PEOs is that you save money and time on recruitment, employee compensation, and administrative work since the provider will handle it. 

Success in staff leasing requires collaborating closely with the PEO to find the best talents that can contribute to your company’s growth. 

Cons

  • Communication may be difficult

Outsourcing, especially to remote teams, has its share of communication challenges. Certain factors such as time zones and different working hours can easily lead to miscommunication. Employees under PEOs may also be unable to contact you directly should they have any concerns regarding their work or pay.

Some potential ways to avoid having this problem are having a weekly alignment meeting with the external team or agreeing with PEOs about the hiring arrangement. 

  • Control over employees decreases 

Outsourcing provides less control over the quality of the external staff’s output since they may not be as experienced as the in-house employees. Hiring and firing employees may also be out of your control; you may need to discuss it beforehand with your outsourcing partner. 

You must communicate your expectations to your outsourcing provider to let them know what you’re looking for in running your business effectively. 

  • Potential security issues 

Back-office tasks may involve handling highly confidential and sensitive information. Because of this, businesses are right to worry about trusting an external staff. However, many BPO companies are solving this issue. 

One of the recent outsourcing trends to watch out for is that BPO companies emphasize cybersecurity. That means outsourcing companies have adopted security measures, such as multi-factor authentication, to ensure no sensitive information leaks. 

How Outsourcing Can Benefit Online Businesses

Outsourcing can benefit any business that feels short-staffed or needs additional hands for temporary projects. There’s a broad scope of functions online businesses can outsource, from accounting and marketing to logistics and customer service. 

Imagine your business has a project where you need a skilled and specialized graphic designer. Hiring a full-time graphic designer or building an entire creative department might take significant time and money. 

Additionally, suppose you do hire a full-time employee. In that case, you’ll need to continue paying their wages and benefits even after project completion, increasing your expenditures.

On the other hand, outsourcing a graphic designer by working with a BPO allows you to hire their services for a certain period. Once the project is finished, your partnership with the graphic designer ends, saving you money.

Small, online companies can also outsource back-office tasks for which they may not yet have the necessary resources. Instead of spending the time interviewing, recruiting, and training new employees, businesses can conveniently work with a BPO to take care of the task.

Outsource Effectively 

Will outsourcing be effective for an online business? It depends on what the business’ needs are. If your business is rapidly growing but short-staffed, outsourcing could be an excellent option to increase productivity and efficiency at reduced costs. It is also important that before hiring or outsourcing, it is necessary to know the work policies in different countries. 

The key to effective outsourcing is to choose the right BPO. Most disadvantages vanish if you work with reputable BPO companies. Reputable companies are committed to providing extra hands to help with workloads and skilled professionals who can contribute to your growth.