Outsourcing is becoming a widespread business practice among startups, helping them grow and expand in a highly competitive business arena. There are three main advantages of outsourcing for a start-up worth considering:
- Lower Operational And Development Costs
Undertaking IT outsourcing is an effective way to cut down on operational costs of infrastructure, recruitment, training, and salaries. There are resources published here that show why businesses should outsource software development.
The most common ways startups use outsourcing to cut down on operational costs is by outsourcing the following business operations:
- Digital marketing
- Human resource
- Accounting and payroll
- Sales and business development
- Customer services and support
- IT and tech support
- Administration
Startups working with limited funds and under time constraints should consider outsourcing product development to countries with comparatively lower hourly rates. It can help them to attract investors faster at a much cheaper rate.
- Scalability, Agility, And Time-Efficiency
Scalability is all about the capacity and capability to grow and expand with business systems, infrastructure, and teams to support the growth.
Many startups, especially in their early stages, don’t have the financial capability to hire full-time employees and secure infrastructure to have all business operations, expertise, and development done in-house. So, it only makes sense to outsource, especially when a startup must solve problems outside its core competencies, there’s no infrastructure, and the task is beyond the expertise of its employees.
A trusted outsourcing partner specialized in processes a startup needs help with can complete many tasks more skillfully and efficiently, at lower costs and higher volumes. More so, an outsourcing partner can help with business processes that are often labor-intensive and mundane.
Depending on the need, a startup can choose among different types of outsourcing:
- Professional outsourcing
Professional outsourcing is the most popular type of outsourcing as it has high cost-saving potential. It includes IT, accounting, legal, administrative, and procurement support, and other specialized services.
- IT outsourcing
As one of the most common services today, IT outsourcing enables startups to subcontract an outside party to care for software development, maintenance, data management, and other IT solutions to help startups grow.
- Manufacturing outsourcing
This type of outsourcing is usually industry-specific and often essential for startups trying to create a minimal viable product and set the production off the ground without economies of scale.
- Process-specific outsourcing
Process-specific outsourcing can be very niche-oriented. For example, legal process outsourcing covers compliance, litigation, and other legal needs. A recruitment process outsourcing covers everything recruitment-related, and knowledge process outsourcing improves products and services through research and data.
- Business process outsourcing
Business process outsourcing is also widespread with an outsourcing partner handling activity such as correspondence, scheduling, lead generation, customer service, and administration.
- Access To A Pool Of Global Expertise
Startups often face a shortage of skilled candidates in their locale. Outsourcing recruitment enables startups to tap into a pool of global talents. Furthermore, this type of outsourcing can help startups to:
- Reduce recruitment costs
When outsourcing recruitment, a startup avoids the usual recruiting costs such as advertising on job boards, recruiting technology, background screening, and applicant tracking system. It also eliminates the need to employ and pay in-house recruiting staff.
- Focus on core business
Recruiting can distract, take away time as well as other resources from core business operations. By outsourcing, a startup can find talent without such distractions, saving valuable time and resources for what needs them most.
- Reduce high turnover rate
A high turnover rate negatively affects productivity, employee engagement, customer service, and company resources. A recruitment partner can match startups with qualified candidates better aligned with the company’s openings, culture, and values.
- Address rapid growth needs
Outsourcing companies can help startups experiencing rapid growth meet the demand for additional skilled candidates quickly and effectively.
- Coordinate recruiting and on-boarding
Outsourced recruiting firms integrate sourcing, recruiting, hiring, and on-boarding which, again, saves both money and time.
Conclusion
Startups should make outsourcing part of their regular business practice, especially in the early stages. It can help them save time and money, scale and build products faster, and address any problems outside of their core responsibilities and competencies.