6 Signs You Need To Outsource Instead Of DIYing
By Marcelo Espinosa, 1Rivet
As your company grows, the need for experts increases. At some point, you’ll likely need help with an area you don’t know much about, whether that’s human resources, a help desk, or mailroom services. When you reach that point, you have two choices: Hire an employee or outsource.
How do you know which one is the right choice? Here are six signs outsourcing is the way to go.
- The people who do the task leave your company even though they like the culture and the team because they can’t move up with your company.
People want to move up to learn, earn, and do more. When their job doesn’t involve a core service or core function of your organization, you may not have anything for them to move up into.
Let’s say you have a receptionist to greet visitors, handle the incoming and outgoing mail, and order supplies. While you may not have a role for them to grow into, an outsourcer that covers reception, mailroom, and printer management will. Partnering with that firm ensures you always have documented procedures and a trained professional in reception — the outsourcer will offer individuals vertical career growth and have a replacement at the ready when people move up.
- Your employees expect terrible internal service.
When poor service becomes the norm, people come to expect and accept it instead of realizing it’s a sign they should outsource. Does your mailroom lose your packages, ship without checking for the best rates, or shut down when someone is out sick or on vacation? Those are signs it’s time to outsource.
- You can’t train people because no one in your organization knows how to do the job. Or, you can’t shop for a solution because no one in your organization knows anything about it.
One clue this is happening: You need to hire someone, but nobody can write the job description. If a task is core to your business, you may be able to reach out to your network for help finding and hiring the right person for a task you’re unfamiliar with. When the work isn’t core, seek out an experienced outsourcer who has the right person and the ability to strategically manage the function.
This same test applies when you need new equipment or solutions, like printers. Technology moves fast, keeping up with innovation and maintaining reseller network relationships that earn discounted pricing can be a full-time job. It’s tough to differentiate a good price for the right printer solution from a good price on the wrong solution (or worse yet, a bad price on the wrong solution).
- Your business is cyclical or seasonal and you want to grow (or shrink) without HR red tape.
Nothing drops your employer star rating on Glassdoor faster than layoffs. You end up with a horde of angry former employees badmouthing your company online and in person to people in their professional networks.
When you outsource, you can grow or downsize the team in response to business cycles or industry seasonality. A lot of colleges to a skeleton crew in the summer.
Have an M&A coming up? That’s a perfect time to restructure. Foresee down periods? You can choose to hire, then lay off employees, pay severance, and watch your unemployment insurance rise. Or, you can outsource and downsize for convenience by rescoping the contract.
- Your equity partners want to see you running lean on headcount.
This also applies to trade associations where management will optically reduce headcount. When you hire a third-party vendor to provide the service, those costs are reflected as a different budget cost.
The expenditure is still there. And while there may or may not be reduced costs, you look like you’re running leaner because your headcount stays low.
- You’re facing a major capital expenditure to invest in innovation or support a product launch.
When you launch your first app, you’ll need an IT help desk. That means vetting vendors and buying a CRM and ticketing software to manage the work flow. Your people will need training on the CRM, equipment to run it and a place to sit. Someone will have to write policy and procedures for using the CRM, integrate it with your existing IT platform, set service level expectations and monitor performance. Those costs add up.
An outsourcer will give you one price for the technology and running the help desk. It will have the business governance in place to run the help desk efficiently. They’ll deal with personnel and are much more likely to know which systems are cutting edge.
Keep these six questions handy because if you’re company is expanding, you’ll face the “do it ourselves vs. outsource it” question over and over.
About The Author
Marcelo Espinosa is VP Strategic Outsourcing for 1Rivet.