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BENEFITS OF OUTSOURCING
CUT COSTS, INCREASE FLEXIBILITY AND GROW SUSTAINABLY
WHAT OUTSOURCING CAN DO FOR YOUR BUSINESS
Through outsourcing certain aspects of your business, you gain increased flexibility, access to a larger pool of talent, and an opportunity for sustainable growth.
A business engages in outsourcing when it purchases services that are typically performed in-house from a third party. Outsourcing is often undertaken by companies who want more time to focus on their core business operations, while outsourced activities are taken care of by a specialised third party. Global connectivity and video conferencing have significantly lowered the barriers to hiring employees in other countries. At a time when companies throughout the world are under massive expense challenges as a result of the Covid-19 outbreak, it is worthwhile exploring cost-reducing options such as recruiting outside of your local market. You can expect to save significantly on labour costs by outsourcing your back office work. Outsourcing is sometimes thought of solely in terms of cost reductions, but it can accomplish much more than that.
CUT DOWN LABOUR COSTS
Cost saving is typically the main reason for outsourcing. Companies are able to spend significantly less, while getting the same work done. South Africa, India, and the Philippines are popular outsourcing destinations, thanks to the lower average wages in these countries. South Africa, especially, offers significant benefits to foreign companies looking to cut costs through outsourcing. Besides the labour costs saved through a lower need for hiring permanent staff, outsourcing can also reduce onboarding and recruitment expenses, including the cost and time spent to search for and interview potential employees, new staff training, healthcare and other benefits for permanent employees, and payroll taxes.
REDUCE INFRASTRUCTURE SPENDING
Fewer permanent and on-site employees mean that your business requires less office space and equipment, and may spend significantly less on utilities and internet. This, of course, reduces your total overhead costs and frees up cash to improve your business’s cashflow. Outsourcing also mitigates the impact of employee turnover by adding guaranteed continuity to your business operations.
HIRE SPECIALISTS OUTSIDE YOUR COMPANY
You don’t always want to hire a specialist for every service your company delivers. And you don’t need to. Outsourcing allows you to tap talent when you need it, without going through the process of hiring and training an in-house employee. You also have the opportunity to execute more effective targeted campaigns and undertake projects that normally couldn’t be considered, by planning and prioritising the tasks worked on by outsourced talent. As an added bonus, passing time-consuming tasks on to your outsource provider, instead of asking an expensive full time employee to handle it, can lead to a much quicker and more affordable turnaround. Outsourcing can enable you and your permanent employees to focus on the core business functions, while everything else is handled behind the scenes.
INCREASE FLEXIBILITY
By leveraging the benefits of outsourcing, your business can expand quickly and sustainably. Without the capital expenditure and admin of onboarding new staff, training, adding office space, and buying more equipment, you can expand your client base by simply getting more (outsourced) hands on board. And when you no longer need the added hands, contract termination is quick and easy - not at all like making redundancies. Outsourcing is a popular solution to industries with cyclical labour demands, as it allows more labour to be added when demand arises. This also endows the company with flexibility to release unneeded assistance as operations slow during the off-season. Partnering with the same outsourcing provider each time provides consistency, in addition to flexibility.
BETTER ACCESS TO TALENT
When it comes to recruiting an employee, your choices may be limited in terms of local candidates. Many businesses have discovered that outsourcing allows them to access talent from all around the world. South Africa, for example, has a large talent pool of highly qualified individuals, eager to gain global exposure. By expanding your search to include foreign countries, you could come across excellent candidates at a fraction of the cost of local candidates.
RE-FOCUS ON BUSINESS GOALS
Outsourcing non-core business processes saves time and frees up energy to be spent on building your brand, money to be invested in research and development, and allows you to move on to serving your clients and growing your business. Most hands-on business owners have exceptional talent, but their business’s growth is often inhibited due to the conviction that they can do it all. While you may be able to handle every task of your business yourself, it doesn’t mean you have to or should. Through outsourcing daily back-office tasks, the business owner’s time can be freed up to focus on generating income and growing the company.
REDUCED NEED FOR MANAGEMENT
Fewer permanent or on-site employees translate to fewer managers and HR staff. Managers can direct more of their time to business operations, rather than employee oversight and solving staff related issues. This is another avenue where outsourcing saves both time, through less time spent on oversight of fewer in-house employees, and money, in the form of fewer manager salaries.
SUSTAINABLE GROWTH
Higher overhead costs are an unfortunate consequence of expanding operations and a growing business. However, outsourcing can cut out much of the capital expenditure associated with growth, including additional office space, equipment, and the cost of recruitment and training new staff. As previously mentioned, you have the ability to terminate your outsourcing contract when your business no longer needs the additional staff, allowing you all the flexibility a growing business needs.
HIRE OFFSHORE ACCOUNTANTS AND BOOKKEEPERS
South Africa, especially, offers significant benefits to foreign companies looking to cut costs through outsourcing. By leveraging the benefits of outsourcing, your business can expand quickly and sustainably. A growing number of accountancy firms are considering outsourcing their admin-intensive back-office work to South Africa. As an outsource provider, BO-SMART is in a unique position to considerably enhance your bottom line. When you outsource to a reputable company like BO-SMART, you can be certain that tasks will be completed effectively and to a high standard. Ultimately, through outsourcing, businesses can refocus their efforts on delivering superior products and services to their clients. Contact us about outsourcing accountancy using the link below.